According to a report published by Bloomberg Agency, the administration of US President (Joe Biden) is developing a new plan to tighten restrictions on exports of semiconductor manufacturing equipment to China, a measure aimed at limiting China's ability to develop advanced chip technology.
According to the report, the new law may double the number of machines that need a special license before being exported to China, which could create new obstacles for US manufacturers to manufacture the technology.
The move is another addition to restrictions imposed in October 2022 that require US companies to obtain special licenses to export certain types of machinery.
The United States is coordinating with the Netherlands and Japan, urging them to take similar actions as both countries are said to be leaders in this sector.
While the new restrictions are meant to rein in China's advanced industries, the measure is expected to cause huge economic damage to US companies that make the technology, as US companies have warned their investors about losing access to them, according to Bloomberg China Opportunities in China. Losing the market will cause the company to lose money. US exporters of the aforementioned technologies generate revenues in the billions.
The Dutch government said last week that it was preparing a series of restrictions on some chip-making machines.
The semiconductor industry is one of the most advanced industries in which major countries compete because the technology is used to manufacture chips that are used in a variety of products including smartphones, cars, aircraft and weapons. With the ever increasing demand for semiconductors, the industry has become very competitive. China is trying to promote the development of advanced chip industry to reduce its dependence on foreign technology. This raised concerns in the United States and other countries about potential national security risks that China's leadership in the industry could pose.
There are three major companies in the United States that specialize in this area: Applied Materials, KLA Corp., and Lam Research, along with Tokyo Electron Co., Ltd. in Japan and ASML Holding NV in the Netherlands completely dominate the industry. Without the products of the above companies, China will not be able to build factories capable of producing advanced electronic chips.
Data shows that China will account for nearly 30% of global semiconductor market sales in 2021, and the new law could slow growth in the US chip industry.
The United States accuses China of stealing intellectual property from American companies and engaging in unfair trade practices, so US lawmakers have taken steps to limit China's access to American technology and to counter China's growing influence in global technology markets.
A US study released earlier this month showed that China has overtaken the US in some areas of advanced technology.