US considers tightening restrictions to Chinese access to advanced semiconductors
Illustrative photo (Getty Images)
US administration is considering stricter trade restrictions on foreign companies supplying advanced semiconductor technology to China, according to Bloomberg.
The US administration is considering implementing stricter trade restrictions against foreign companies that continue to provide China with access to advanced semiconductor microelectronics and manufacturing equipment.
According to sources familiar with recent discussions, the US is contemplating using the Foreign Direct Product Rule (FDPR) as leverage over allies. This rule allows a country to control foreign-produced goods if they contain even a small amount of American technology.
Such a step, considered draconian by allies, could be used to restrict the activities of Japanese company Tokyo Electron and Dutch company ASML in China. These companies produce equipment vital to the semiconductor industry.
According to anonymous sources, due to the confidentiality of the discussion, the US is presenting this idea to officials in Tokyo and The Hague as an increasingly likely scenario if these countries do not strengthen their own measures against China.
The administration is in a difficult position. American companies believe that export restrictions to China unfairly punish them and are demanding changes. Meanwhile, allies see no reason to change their policies with only a few months left until the US presidential election.
The goal is to convince allies, who have already limited some supplies of key equipment, to restrict their companies' ability to service and repair equipment already in China, which is prohibited for American companies.
The US is also considering additional sanctions against specific Chinese companies that manufacture chips.
Earlier, it was reported that China is investing another $47.5 billion in chip production.
