The United States is considering imposing unilateral restrictions on China’s access to AI memory chips and equipment capable of making such semiconductors starting next month, a move that would further intensify technological rivalry between the world’s largest economies.
The move is aimed at preventing Micron Technology Inc. and South Korea’s top memory chip makers SK Hynix Inc. and Samsung Electronics Co. from supplying Chinese companies with so-called high-bandwidth memory (HBM) chips, according to people familiar with the matter, who stressed that no final decision has been made. The three companies dominate the global HBM market.
The Biden administration is working on several restrictions aimed at keeping vital technology out of the hands of Chinese manufacturers, including limits on sales of chipmaking equipment. The rule would impose a new set of restrictions on artificial intelligence memory chips, the latest arena of competition between the United States and China.
If approved, the measure would cover HBM2 and more advanced chips such as HBM3 and HBM3E, the most advanced AI memory chips currently in production, the people said, as well as the tools needed to make them. HBM chips are needed to run AI accelerators like those offered by Nvidia Corp. and Advanced Micro Devices Inc.
Micron would be largely unaffected as the Boise, Idaho-based chipmaker has refrained from selling its HBM products to China after Beijing banned its memory chips in critical infrastructure in 2023, the people said. They spoke on condition of anonymity to discuss confidential government information.
It is unclear what authority the United States would use to restrict South Korean companies, the people said. One possibility is the foreign direct products rule, or FDPR, which allows Washington to impose controls on foreign-made products that use even the smallest amount of American technology. Both SK Hynix and Samsung rely on U.S. chip design software and equipment from companies such as Cadence Design Systems Inc. and Applied Materials Inc.
Through a spokesperson, the Commerce Department said in a statement that it is “continuously assessing the changing threat environment and updating our export controls, as necessary, to protect U.S. national security and safeguard our technology ecosystem. We remain committed to working closely with our allies who share our values.”
Representatives for Micron, Samsung and SK Hynix declined to comment.
China said it firmly opposes U.S. efforts to suppress China’s semiconductor industry and accused Washington of violating the rules of international trade.
“US measures will not stop China’s technological progress and will only encourage Chinese companies to become self-sufficient,” said a Chinese Foreign Ministry spokesman in response to a Bloomberg query.
The new restrictions will likely be unveiled in late August as part of a broader package that also includes sanctions against more than 120 Chinese companies and new limits on several types of chip equipment.with exceptions for key allies such as Japan, the Netherlands and South Korea, the people said. That means the equipment measures would primarily target US companies.
President Joe Biden’s administration has already asked Seoul to control chip technology exports to China, with a particular focus on manufacturing equipment, and adopt controls similar to those the United States has already implemented, Bloomberg News reported.
On the other hand, the United States has been putting pressure on Japan and the Netherlands (home to two of the largest semiconductor equipment companies) to prevent those companies from servicing restricted equipment already in China, as Bloomberg previously reported.
While the new measures would curb direct sales of HBM chips to Chinese companies, it is unclear whether high-end memory chips combined with AI accelerators would be allowed to be sold in China. Samsung now supplies HBM3 for Nvidia’s H20 chips, a less powerful AI accelerator that has been licensed to Chinese companies, Bloomberg News reported.
As part of its broad HBM-related restrictions in the same export control package, the United States plans to lower the threshold for what is referred to as advanced dynamic random access memory, or DRAM. A single HBM chip contains multiple DRAM dies.
SK Hynix’s BMs are mainly used with Nvidia’s higher-end GPUs, whose export to China is already restricted. Samsung may also have a limited impact, as its HBM sales are still too small to affect overall sales.
