US prepping export curbs on key AI chip technology – reports

While China's legacy chip production surges as funds pour into the sector, the US is reportedly considering more export curbs.

Robert Clark, Contributing Editor, Special to Light Reading

June 12, 2024

2 Min Read
Chinese flag in front of an office building.
(SOURCE: ALAN NOVELLI/ALAMY STOCK PHOTO)

Is the US ready to tighten the screws even further on Chinese access to high-end chip technology? It seems a fair bet, with Bloomberg reporting administration officials are discussing ways to curtail sales of gate all-around (GAA) chip architecture, essential for 3nm chips and below.

US firms Nvidia, Intel and AMD and their Asian production partners TSMC and Samsung Electronics expect to start mass production of chips deploying GAA within the next year.

The Commerce Department's enforcement arm, the BIS, has already completed an initial draft of its GAA rules, Bloomberg said. Besides the proposed new GAA rules, Washington officials are also considering curbs on high-bandwidth memory chips that are critical for efficient AI processing.

This looks set to be the latest restriction after five years of steadily escalating prohibitions, part of a sanctions regime that is complex, unevenly enforced and often criticized by industry. But has it been effective? 

It has certainly slowed down China's chip development, though unsurprisingly Chinese companies have come up with a series of workarounds, like stocking up inventory ahead of a ban, buying through third parties or renting AI training time on US clouds.

Higher cost, lower yield

Most notoriously, Huawei and partner SMIC shocked Washington by building a 7nm Kirin chip for Huawei's 5G Mate 60 phones last September.

Yet US officials would no doubt regard the much higher cost – around 40% to 50% - and the much lower efficiency of this homegrown process as a positive outcome. Reportedly, a proposed new 5nm chip would have a yield of less than a third of TSMC's.

The other impact of the export bans is on the market.

As many have predicted, China's production of mature technology chips has exploded. Output grew 40% in the first three months of the year and was almost triple the 2019 level, the South China Morning Post has reportedquoting official figures. Chinese fabs produced 98.1 billion units in the quarter, with output up 28% in March alone.

The growth drivers have been from emerging new sectors such as EVs and IoT, but also the volume of investment that has been directed into chip manufacture as a result of the US bans.  

Reportedly, China’s chip export volumes are starting to rise as well. China now has 77 semiconductor fabs, mostly making mature technology chips, according to chip industry research firm Trend Force.

Its latest state-backed chip fund provides a $47.5 billion war chest for China to grow its capabilities in this strategic sector. 

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About the Author(s)

Robert Clark

Contributing Editor, Special to Light Reading

Robert Clark is an independent technology editor and researcher based in Hong Kong. In addition to contributing to Light Reading, he also has his own blog,  Electric Speech (http://www.electricspeech.com). 

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