US reported to have toned down China chip curbs - Bloomberg

Investing.com -- The Biden administration is reportedly preparing to tighten restrictions on sales of semiconductor equipment and artificial intelligence memory chips to China, marking an escalation in efforts to curb Beijing’s technological advancements, Bloomberg News reported citing sources familiar with the matter. 

The proposed measures, which have undergone several revisions and are not yet finalized, could be announced as early as next week.

The deliberations follow months of discussions among U.S. officials, negotiations with allies like Japan and the Netherlands, and lobbying from U.S. chip equipment manufacturers who have warned that severe restrictions could harm their businesses. 

These adjustments include a narrower focus on which Chinese firms will face sanctions. For instance, while earlier drafts considered adding several Huawei suppliers to a trade restriction list, the current plan omits ChangXin Memory Technologies Inc., which is working on AI memory chip technology, the report added.

The Commerce Department and National Security Council have declined to comment on the developments.

News of the adjusted measures has led to a rally in chip-related stocks across Asia and Europe. Companies such as ASML Holding NV (AS:ASML ) and Tokyo Electron Ltd. (TYO:8035 ) saw gains, with analysts describing the revised restrictions as less severe than market expectations.

The proposed rules would impose sanctions on two Semiconductor Manufacturing International Corp. factories associated with Huawei and add over 100 Chinese firms to a trade blacklist, particularly those involved in semiconductor manufacturing equipment rather than chip fabrication. 

American equipment manufacturers like Lam Research Corp (NASDAQ:LRCX )., Applied Materials Inc (NASDAQ:AMAT )., and KLA Corp. have pushed back against broader restrictions, citing competitive disadvantages against international rivals whose governments have not fully matched U.S. measures.

The U.S. has sought alignment from allies in Japan and the Netherlands, which have enacted partial restrictions but resisted more stringent curbs. 

While the latest U.S. rules would exempt these countries from provisions under the Foreign Direct Product Rule, their willingness to adopt additional measures remains uncertain.

Additionally, the new restrictions are expected to target high-bandwidth memory chips essential for AI applications, potentially impacting Samsung Electronics Co (F:SAMEq )., SK Hynix Inc (KS:000660 )., and U.S.-based Micron Technology Inc (NASDAQ:MU )., the report added.

Source: Investing.com