Restrictions on semiconductor shipments could reportedly be introduced next month

The US government plans next month to tighten restrictions on the country's shipments of semiconductors used for artificial intelligence, along with chipmaking tools, to China, Reuters reported this week, citing its sources.

People familiar with the matter told the news outlet that the Commerce Department intends to publish new regulations based on curbs communicated in letters earlier this year to three US companies - KLA, Lam Research and Applied Materials. The plan for the new rules has not been previously reported, they noted.

According to the report, the letters, which the companies publicly acknowledged, forbade them from exporting chipmaking equipment to Chinese factories that produce advanced semiconductors with sub-14 nanometer processes unless the sellers obtain licenses from the US Commerce Department.

The rules would reportedly also codify restrictions in Commerce Department letters sent to Nvidia Corp and Advanced Micro Devices last month, instructing them to halt shipments of several artificial intelligence computing chips to China unless they obtain licenses.

The regulations could potentially apply to companies trying to challenge Nvidia and AMD's dominance in artificial intelligence chips, the report pointed out.

"The strategy is to choke off China and they have discovered that chips are a choke point. They can't make this stuff, they can't make the manufacturing equipment," Jim Lewis, technology expert at the Center for Strategic and International Studies, told Reuters, adding: "That will change."

The world's two largest economies, US and China, have been racing to dominate in key technologies, including semiconductors. China is significantly behind the United States in chip development, with its largest chipmaker SMIC aiming to wean itself off foreign technology.

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