U.S. Measures to Contain China’s Semiconductor Industry: Timeline Since July 2022

On October 7, the United States announced a new package of semiconductor export restrictions. The objective was to deny China access to advanced chips and further restrict its ability to manufacture cutting-edge semiconductors domestically.

The Bureau of Industry and Security of the U.S. Department of Commerce issued nine new rules detailing export controls on advanced chips, transactions involving supercomputing facilities, and transactions with certain entities included on U.S. sanctions lists. The new rules also introduced additional controls on specific semiconductor manufacturing equipment and on transactions involving the end use of certain integrated circuits.

According to the filing, the rules would be less restrictive for companies “owned by multinational corporations.” The expanded controls would affect 28 Chinese organizations on U.S. sanctions lists, most of them supercomputing institutes and companies involved in artificial intelligence development. Some of the new rules took effect immediately, while others were scheduled to enter into force by October 21.

The U.S. Bureau of Industry and Security also added 31 new Chinese entities to the Unverified List, including major Chinese memory chip manufacturer YMTC. Companies seeking to export or re-export items included on the Commerce Control List to China would now be required to obtain U.S. authorization.

Entities placed on the Unverified List are one step away from being added to the Entity List if they fail to meet U.S. requirements within 60 days.

These new rules followed several months of measures by the United States aimed at restricting China’s ability to obtain advanced chips and the tools required to manufacture them.
Since July, the Biden administration had prohibited Chinese companies from acquiring equipment for manufacturing chips at 14 nm and more advanced process nodes, with a particular focus on logic chips such as CPUs and GPUs.

Since August, the United States had also been considering broader restrictions in areas such as memory chips, as major Chinese chipmakers YMTC and SMIC continued developing their own semiconductor technologies.

TechNode summarizes the key steps taken by the United States to restrict China’s semiconductor industry since July 2022:

July 6 — Lithography Equipment

• U.S. authorities sought to persuade Dutch semiconductor equipment supplier ASML to stop selling older deep ultraviolet lithography equipment (DUV) to China. Such equipment can be used to manufacture chips at process nodes as advanced as 5 nm.
• According to Bloomberg, citing an unnamed source, the United States also pressured Japan to restrict exports of lithography equipment to China.

July 30 — Equipment for Manufacturing 14 nm Chips

• The United States further restricted China’s access to semiconductor equipment by expanding previous restrictions from tools used for manufacturing chips at 10 nm to those used at 14 nm.
• Two major semiconductor equipment suppliers, Lam Research and KLA Corporation, said the U.S. Department of Commerce had instructed them not to supply mainland China with equipment used to manufacture chips at 14 nm or more advanced nodes.
• Sources familiar with the matter told Bloomberg that all U.S. equipment manufacturers had received similar notifications during the previous two weeks.

August 2 — Memory Chips

• The United States considered measures aimed at restricting Chinese memory chip manufacturer YMTC by banning exports of equipment used to manufacture memory chips with more than 128 layers, according to Reuters.
• Unnamed sources at two leading U.S. semiconductor equipment companies said the ban could also affect other chipmakers, including Samsung and SK Hynix, both of which operate plants in mainland China.
• According to the sources, discussions were still at an early stage and no draft regulation had yet been submitted.
• The number of layers in memory chips is as important a performance indicator as process nodes are for logic chips. YMTC developed 128-layer memory chips in 2020 and began mass production the following year.

August 12 — EDA Software

• The United States announced a new ban on exports of electronic design automation software (EDA) used for advanced semiconductor manufacturing in China.
• The restriction stated that U.S. companies should not supply mainland China with EDA software for chips at 3 nm and more advanced nodes.
• Analysts cited by Caixin said the immediate impact on China would be limited, but the restrictions could constrain further development in the longer term.

August 31 — High-Performance GPU Chips

• U.S. authorities introduced a new restriction on the export of high-performance GPU chips to China, citing concerns over their potential use by the Chinese military, according to a filing by GPU giant Nvidia with the U.S. Securities and Exchange Commission.
• Nvidia’s main competitor, AMD, told Reuters that it had also been notified of the new restrictions and that some of its computing accelerator products would be affected.
• September 21 — Nvidia Seeks to Circumvent U.S. Restrictions with Alternative GPUs for ChinaNvidia told Caixin and other media outlets that it would supply Chinese customers with alternative GPUs based on its latest Hopper architecture, allowing it to comply with U.S. restrictions while continuing to serve the Chinese market.
• The company said the alternative products could meet most requirements of the Chinese market and that it would seek a U.S. license if Chinese customers required restricted products.