New U.S. Rules Hit Chinese Tech Firms Amid Huawei Chip Controversy

The U.S. government has added over two dozen entities, including a Chinese company tied to a controversial chip, to its restricted trade list. The move is part of an ongoing effort to curb China’s access to advanced technologies that could support its military or surveillance capabilities.

Key Developments

Sophgo and Other Entities Blacklisted
The U.S. Commerce Department added 25 Chinese companies and two Singapore-based entities to its Entity List. This designation prohibits these companies from receiving U.S. technology or goods without a special license, which is rarely granted.

TSMC Chip Found in Huawei Processor
Sophgo was implicated after a chip it ordered from Taiwan Semiconductor Manufacturing Co. (TSMC) was found in Huawei’s Ascend 910B AI system. Sophgo denies any direct or indirect business with Huawei, but the U.S. views its actions as a violation of export controls.

Tighter Restrictions on Advanced Chips
The U.S. has expanded curbs on advanced semiconductors, including chips used in artificial intelligence. These restrictions affect manufacturing and packaging companies exporting chips at 14- or 16-nanometer nodes or below.

Impact on Chipmakers
Major chip manufacturers like TSMC and Samsung may face new hurdles. The rule also targets DRAM technology used in AI processors, likely affecting Chinese memory chip maker CXMT.

Broader Implications
The Commerce Department cited national security concerns, noting that some entities contribute to China’s military modernization, advanced AI research, and high-tech surveillance.

What’s Next?

U.S. officials emphasize accountability for chipmakers, requiring them to verify that their products do not reach restricted entities. Meanwhile, the latest restrictions aim to further limit China’s ability to develop advanced weapons and AI systems.

This move underscores escalating tensions between the U.S. and China over technological dominance, with the semiconductor industry at the center of the dispute.