US-China chip war: New export restrictions announced by Washington

 US-China chip war: New export restrictions announced by Washington

The Biden administration has made measures to halt more shipments of cutting-edge processors to China, including two of Nvidia's built-for-China chips.

The objective is to address gaps that emerged when the US implemented semiconductor export restrictions in October of last year.

They are intended to stop China's military from acquiring cutting-edge equipment or chips.

The decision makes it more difficult for businesses like Intel and Advanced Micro Devices to sell new or existing chips to China.

Following the news, shares of all three firms decreased on Wall Street.

In a filing, Nvidia claimed that the new export limits would prevent the sale of two of its high-end artificial intelligence processors that it developed for the Chinese market as well as one of its gaming chips.

The new regulations are "overly broad" and "risk harming the US semiconductor environment without advancing national security as they promote overseas customers to look elsewhere," according to the Semiconductor Industry Organization, which represents 99% of the US chip sector by revenue.

A representative for the Chinese embassy said that the country "firmly opposes" the new limitations, which will take effect in 30 days and also apply to Russia and Iran.

In reaction, China began limiting the shipments of two essential minerals for the semiconductor industry—gallium and germanium—two months ago.

In terms of gallium and germanium supply chains globally, China is by far the dominant player. According to the trade group Critical Raw Materials Alliance (CRMA), it generates 60% of the world's germanium and 80% of the gallium.

The components are "minor metals," which means that they are often produced as a by-product of other operations and are not typically found in nature on their own.

Along with the US, Japan and the Netherlands, which is home to important chip equipment manufacturer ASML, have also restricted China's access to chip technology.

The ongoing back-and-forth between the two largest economies in the world has sparked worries about the growth of so-called "resource nationalism," in which states hoard essential resources to impose power over other nations.