According to the United States Commerce Department's Bureau of Industry and Security, the US has added 49 firms to its export restrictions list, including 42 from China, for allegedly offering military support to Russia in violation of current sanctions.

According to the rule,“ The Bureau of Industry and Security (BIS) amends the Export Administration Regulations by adding 49 entities under 52 entries to the Entity List. These entries are under the destinations of the People’s Republic of China (China) (42), Estonia (1), Finland (1), Germany (1), India (3), Turkey (2), United Arab Emirates (1), and the United Kingdom (1)."

The US government claimed that the entities were operating against US national security or foreign policy objectives, according to the paper.

In late September, the South China Morning Post (SCMP) reported that China is preparing to construct artificial intelligence (AI) chip factories equipped with particle accelerators.

By harnessing particle accelerators in the semiconductor manufacturing process, China seeks to reduce its reliance on foreign technologies, a move deemed critical for its economic autonomy, especially amid Western attempts to limit China's technological advance.

This development could potentially serve as a strategic workaround for current sanctions imposed on China by the US. Currently, the Netherlands-based Advanced Semiconductor Materials Lithography holds a monopoly on the technology required for the top-of-the-line machines that are necessary for advanced chip production.

The US has effectively banned the delivery of these machines to the tech industry in China in conjunction with the restriction of advanced chip sales from US-based companies to Chinese ones. 

US semiconductor giants warn Biden admin against sanctioning China

Leading semiconductor companies in the US, including Qualcomm, Nvidia, and Intel have called on the Biden administration to restrict China's access to high-end microchips: arguing that such measures could backfire, inflicting significant harm on the US economy.

Representatives from Nvidia, Intel, and Qualcomm have held meetings with key officials in the Biden administration, including Secretary of State Antony J. Blinken and Commerce Secretary Gina M. Raimondo. These meetings aimed to persuade the administration to reconsider imposing additional restrictions on China, which has become a crucial market for American semiconductor companies.

China currently accounts for nearly a third of the global semiconductor market and contributes over $50 billion in combined annual revenue for Intel, Nvidia, and Qualcomm. The executives of these companies have emphasized that a loss of revenue of this magnitude could lead to layoffs, reduced investments in technology development, and diminished economic growth, particularly in semiconductor hubs located in Ohio, New York, and Arizona.

Furthermore, the representatives raised concerns that the US government's actions may inadvertently accelerate China's efforts to establish its independent chip industry, potentially resulting in Chinese-made chips dominating the global market.

China has responded to the US restrictions by imposing sanctions on US semiconductor giant Micron Technology and implementing export restrictions on rare earth materials essential for chip production. These actions have raised concerns about disruptions in the global supply chain for electronic chip-making.