The administration plans to tighten export controls announced in October last year to restrict sales of some AI chips to China, seeking to contain its rival’s tech development…reports Asian Lite News
The US is preparing to curtail Chinese companies’ access to cloud computing services including Amazon.com Inc’s and Microsoft Corp’s, the Wall Street Journal reported, citing people familiar with the situation.
Washington is considering requiring cloud providers to seek government permission before serving Chinese firms that employ such platforms to train artificial intelligence (AI) models, the Journal reported.
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Microsoft Azure and Amazon Web Services are the global leaders in the business of providing Internet computing to enterprises, and compete in China with the likes of Alibaba Group Holding Ltd through local, state-affiliated data center partners.
The US administration plans to tighten export controls announced in October last year to restrict sales of some AI chips to China, seeking to contain its rival’s development of a technology considered key to the country’s geopolitical and economic future.
Part of the measures under discussion included restricting cloud access for Chinese AI developers, which was first reported by the Journal last week.
Under the broader US Department of Commerce proposal, expected for next month, the US would revise export controls to make it harder to sell some chips to China without a license.
The move is aimed in part at Nvidia Corp’s A800 chip, which the US-based company designed after the earlier controls were announced. The product’s configuration comes just within those limits.
The US and China are escalating their technological conflict. On Monday, Beijing slapped controls on the export of metals critical to the chip, electric vehicle and defense industries, showing it has some power to retaliate against moves by the US, Japan and Europe to cut Beijing off from advanced technology.
The controls on metals, which China said were aimed at protecting national security and its interests, will require exporters to seek permission to ship some gallium and germanium products.
Meanwhile, China is restricting the exports of two metals key to the manufacturing of semiconductors, its commerce ministry said late Monday, a warning to Europe and the United States in their escalating technological trade war over access to microchips.
These new regulations — imposed on grounds of national security — will require exporters to seek a license to ship some gallium and germanium compounds starting Aug. 1, China’s commerce ministry said. Applications for these export licenses must identify importers and end users and stipulate how these metals will be used.
This move is part of an intensifying global battle for technological supremacy — with China as the world’s largest source of both metals, according to a European Union study on critical raw materials this year. It also comes just as U.S. Treasury Secretary Janet Yellen is preparing to visit China later this week.
“This move will have a limited impact on global supply given the targeted scope,” Eurasia Group analysts, Anna Ashton, Xiaomeng Lu and Scott Young wrote in a note.
“It is a shot across the bow intended to remind countries including the United States, Japan, and the Netherlands that China has retaliatory options and to thereby deter them from imposing further restrictions on Chinese access to high-end chips and tools,” they added, pointing to the lack of outright bans for specific countries or end-users.
At a regular press conference in Beijing on Tuesday, China’s Ministry of Foreign Affairs spokesperson Mao Ning reiterated the country’s export controls are in accordance with the law and are not targeted at any specific country.
Shares of Chinese germanium producers soared on Tuesday in anticipation of rising prices for the raw materials, which may now face at least a short-term supply disruption.
On Tuesday, Yunnan Lincang Xinyuan Germanium Industrial surged by the 10% limit, closing at its highest in about 15 months in Shenzhen. Yunnan Chihong Zinc & Germanium ended up 6.1% at its highest level since mid-May in Shanghai. Both outperformed the 0.2% gain for the CSI 300 index of China’s largest A-share listings.
South Korea’s industry ministry and Taiwan foreign ministry officials said Tuesday China’s curbs would have little short-term impact.
Gallium is a soft silver metal used to produce compound semiconductor wafers for electronic circuits, semiconductors and light-emitting diodes, while germanium is used in the manufacturing of fiber optics to transfer data and information.
“The economies of scale in China’s extensive and increasingly integrated mining and processing operations, along with state subsidies, have allowed it to export processed minerals at a cost that operators elsewhere can’t match, perpetuating the country’s market dominance for many critical commodities,” Eurasia Group analysts said.
“But past Chinese attempts to leverage that dominance by restricting exports have reduced global availability and raised global prices. Higher prices have in turn spurred foreign competition by making mining and processing ventures outside of China more cost-competitive,” they added.
In October, the U.S. launched sweeping rules aimed at cutting off exports of key chips and semiconductor tools to China. The measures are believed to have the potential to cripple China’s ambitions to boost its domestic technology industries. The U.S. has also lobbied key chipmaking nations and allies, like the Netherlands and Japan, to introduce export restrictions of their own.
The Netherlands responded Friday with new export restrictions on advanced semiconductor equipment. This will effectively bar ASML from exporting to China. But these latest Dutch curbs do not specifically target ASML, one of the most important semiconductor companies in the world.
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