US further tightens China's access to advanced chip tech

The news: The US government will tighten measures restricting China's access to advanced semiconductors and chipmaking equipment, Bloomberg reports, citing unnamed sources. The measures aim to close loopholes in restrictions announced last October, and they include requiring overseas manufacturers be licensed to sell to Chinese chip design firms and stronger controls on selling advanced chipmaking equipment to Chinese companies.

The numbers: US tech companies including Nvidia and Applied Materials have lost hundreds of millions in orders after the initial restrictions were announced last year. The scale required to profitably manufacture advanced semiconductors has chiselled the market down to three main players: USA-based Intel; South Korea’s Samsung Electronics; and Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker and the main manufacturer of Nvidia's chips.

The context: In 2022, the USA announced plans to impose export controls on semiconductor technologies involved with advances semiconductors and turbines, citing national security concerns. Japan and the Netherlands have agreed to limit China's access to advanced chip machinery. Subsequently, China has boosted investment in building its own chipmaking capabilities at home.