US Adds 27 Chinese Firms to Entity List Over TSMC Chips in Huawei Processors

The US Department of Commerce has blacklisted 27 Chinese companies, including Zhipu AI and Sophgo.

Introduction

The Biden administration has taken a decisive step in its ongoing effort to curb China’s access to advanced semiconductor technology. On Wednesday, the U.S. Department of Commerce added over two dozen Chinese and Singaporean companies to its Entity List. Among them are Zhipu AI, a prominent developer of large language models, and Sophgo, a company linked to the production of chips incorporated into Huawei’s Ascend 910B artificial intelligence (AI) processor.

This move reinforces the U.S.’s commitment to protecting national security and preventing the use of American technology in advancing China’s military modernization and AI capabilities.

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Key Takeaways

  1. Expanded Entity List: 27 new companies, including Zhipu AI and Sophgo, face stringent export restrictions.
  2. Focus on Huawei: Restrictions target Huawei’s AI processor advancements, which rely on chips from Taiwan Semiconductor Manufacturing Co. (TSMC).
  3. Export Controls Tightened: Enhanced measures prevent advanced semiconductor exports to China, especially those supporting military or AI developments.
  4. Broader Impacts: Memory chips like DRAM and chip packaging firms face new licensing requirements.
  5. Strategic U.S. Measures: The actions align with broader export control policies targeting China’s technological and military advancements.

https://medium.com/@kumari.sushma661/1-3-billion-japan-invests-to-rapidus-to-strengthen-semiconductor-industry-a47409312035

Strengthened Restrictions on China’s AI and Military Modernization

The newly implemented restrictions target companies accused of supporting China’s military ambitions and high-tech surveillance. The Commerce Department cited activities “contrary to U.S. national security and foreign policy interests” as the basis for these actions.

Sophgo and TSMC Connection

Sophgo, a Chinese semiconductor firm linked to Bitmain (a bitcoin mining equipment manufacturer), came under scrutiny after a TSMC-manufactured chip was found in Huawei’s AI processor. Huawei, already blacklisted in 2019, remains central to China’s AI and chip manufacturing ambitions.

TSMC, a leading global semiconductor manufacturer, was previously directed by the U.S. to halt shipments of certain advanced chips. While TSMC declined to comment on the latest development, its compliance with U.S. regulations underscores the global impact of American trade policies.

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Zhipu AI and AI Research Restrictions

Zhipu AI, a company backed by Chinese tech giants Alibaba and Tencent, was added to the Entity List for contributing to China’s military through advanced AI research. In a statement on WeChat, Zhipu claimed the decision lacked a factual basis and asserted that its operations would not be significantly affected. The company highlighted its self-reliance in large language model technology.

AI Export Curbs

New regulations now restrict exports of semiconductors at 14nm or below, a critical threshold for advanced AI applications. Chipmakers must meet stringent licensing conditions and work with approved partners to ensure compliance.

Impact on Memory and Chip Packaging Firms

The latest rules also impose tighter controls on DRAM, a type of memory essential for high-bandwidth applications like AI processors. This change specifically affects Chinese memory chip maker Changxin Memory Technologies (CXMT). Additional restrictions are likely to impact more facilities under CXMT’s operations.

Moreover, chip packaging and lithography equipment manufacturers exporting to China face new reporting and due diligence obligations. These measures aim to prevent the diversion of advanced technologies to entities supporting China’s military or surveillance systems.

https://medium.com/@kumari.sushma661/1-3-billion-japan-invests-to-rapidus-to-strengthen-semiconductor-industry-a47409312035

Huawei’s Shadow Network and Broader Implications

The Commerce Department noted that 16 of the newly listed companies are tied to developing technologies for advanced weapons, weapons of mass destruction, and high-tech surveillance. Many of these entities are also suspected of supporting Huawei’s operations through indirect channels, known as its “shadow network.”

The restrictions highlight the U.S.’s broader strategy of holding semiconductor foundries and other critical suppliers accountable for ensuring compliance with export rules.

Industry Reactions and Next Steps

While Huawei and Sophgo did not immediately respond to requests for comment, the Chinese embassy in Washington has yet to issue an official statement. TSMC and other affected companies, including Samsung, may face operational adjustments in response to the new regulations.

Commerce official Alan Estevez emphasized the importance of verifying that chips are not diverted to restricted entities. “We are holding foundries accountable,” he said.

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Conclusion

The U.S.’s latest actions mark a significant escalation in its efforts to limit China’s access to advanced semiconductor technology.

targeting companies like Zhipu AI and Sophgo, the Biden administration aims to stifle China’s AI advancements and military applications.

As these measures ripple across the global tech industry, companies worldwide must navigate increasingly complex compliance requirements to maintain access to U.S. markets and technology.

 

Kumar Priyadarshi
Kumar Priyadarshi

Kumar Joined IISER Pune after qualifying IIT-JEE in 2012. In his 5th year, he travelled to Singapore for his master’s thesis which yielded a Research Paper in ACS Nano. Kumar Joined Global Foundries as a process Engineer in Singapore working at 40 nm Process node. Working as a scientist at IIT Bombay as Senior Scientist, Kumar Led the team which built India’s 1st Memory Chip with Semiconductor Lab (SCL).

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