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US to prepare a bill to limit chips export to China

Posted May. 05, 2023 08:00,   

Updated May. 05, 2023 08:00


The U.S. Congress announced that it would introduce "China Competition Bill 2.0," a new package bill against China, including reinforcing semiconductor export regulations.

U.S. Senate Democratic Leader Chuck Schumer held a press conference with the Senate Standing Committee chairs on Tuesday (local time) and said, “We must continue to bolster national security with the CHIPS Act as a model and counter against and compete with China in the world. Accordingly, we will introduce new and significant bipartisan legislation.” In particular, Schumer emphasized, “The focus will be on limiting the flow of advanced technologies to the Chinese government. We need measures such as export restrictions by the Joe Biden administration, which control the inflow of semiconductor equipment and technologies to China.”

This means that the Biden administration will ratchet up export controls to China at the congressional level after introducing export regulations for artificial intelligence (AI) semiconductors and advanced semiconductor equipment last year. “We will limit investment in the Chinese government,” Schumer added. “This means giving new powers to our finance and commerce secretaries to stop the flow of funds used to develop China's high-tech industries.”

There are concerns that if the U.S. Congress, which passed the CHIPS Act last year, pushes for a package bill that strengthens regulations targeting China comprehensively, this could pose an added burden on domestic companies.

The domestic semiconductor industry sees this bill as the U.S. intends to keep China in check early on and take the lead in the supply chain in the growing AI semiconductor market. For a domestic company with China as its core semiconductor consumption market, this is a negative sign for the growth potential of the AI semiconductor and related markets. In particular, there is a possibility of tighter China-facing semiconductor regulations as next year's U.S. presidential election draws closer, raising concerns that market uncertainties will exacerbate in the mid-to-long term.

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