U.S. rolls out new chip-related export controls as China makes industry advances
Illustration of the China and U.S. flag on a central processing unit.
Blackdovfx | Istock | Getty Images
The Biden administration is rolling out new export controls on critical technologies, including quantum computing and semiconductor goods, as China makes advances in the global chips industry.
Released by the U.S. Department of Commerce on Friday, the rules cover quantum computers and components; advanced chipmaking tools; some components and software related to metals and metal alloy; as well as high-bandwidth chips, a critical component for AI applications.
The department cited “national security and foreign policy reasons” for the move, and said it was the product of extensive discussions with international partners.
These restrictions cover worldwide exports, but adds exemptions for countries that add similar controls, such as Japan and the Netherlands have done in the past. The department’s Bureau of Industry and Security (BIS) expects more countries will move to impose similar measures.
“Today’s action ensures our national export controls keep step with rapidly evolving technologies and are more effective when we work in concert with international partners,” Alan Estevez, under secretary of the bureau, said in a statement.
“Aligning our controls on quantum and other advanced technologies makes it significantly more difficult for our adversaries to develop and deploy these technologies in ways that threaten our collective security,” he added.
Officials will hold a 60-day public comment period before issuing a final ruling.
Along with semiconductors, both China and the U.S. seek to be leaders in quantum computing, which they see as a potentially transformative technology.
Though China is not explicitly named in the documents, the controls are in line with a series of moves the Biden administration has taken to limit Beijing’s developments in areas such as AI and computing.
BIS also said it is also continuing to strengthen relationships with its allies to boost the effectiveness of export controls aimed at degrading Russia’s military capabilities, as well as its “enablers” such as Belarus and Iran.
U.S. export control efforts hit road bumps
Amid increased restrictions and tech sanctions from the Washington, Beijing has ramped up its sufficiency push, setting up billions in investments in critical technologies to strengthen its chip-making industry.
A recent analysis of China’s semiconductor technology, by Tokyo-based semiconductor research company TechanaLye, found that Chinese-made processor chips are approaching a level just three years behind the industry leader, Taiwan Semiconductor Manufacturing Co Ltd, according to Nikkei Asia.
As the U.S. continues to step up controls, the global industry has shown a degree of reluctance.
China is the largest semiconductor market in the world, and its firms remain key clients of many of the world’s leading semiconductor companies, including those in the U.S.
On Wednesday, the chief executive of Dutch chip equipment giant ASML, which is restricted from providing its industry-leading advanced semiconductor equipment to China, reportedly said that the U.S.-led restrictions have become more “economically motivated” over time, adding he expects more push-back.
The Dutch government has said it will take ASML’s economic interests into account when deciding whether to tighten semiconductor export rules further.
Meanwhile, South Korean Trade Minister Cheong Inkyo reportedly said this week that the U.S. should offer more incentives if it wants Seoul to comply with additional export curbs on China’s semiconductors.
Beijing has long maintained that the U.S. and its allies’ chip restrictions are anti-competitive and hurt the global semiconductor supply chain.
Technology
Amazon was questioned by House China committee over ‘dangerous and unwise’ TikTok partnership
Amazon logo on a brick building exterior, San Francisco, California, August 20, 2024.
Smith Collection | Gado | Archive Photos | Getty Images
Amazon representatives met with the House China committee in recent months to discuss lawmaker concerns over the company’s partnership with TikTok, CNBC confirmed.
A spokesperson for the House Select Committee on the Chinese Communist Party confirmed the meeting, which centered on a shopping deal between Amazon and TikTok announced in August. The agreement allows users of TikTok, owned by China’s ByteDance, to link their account with Amazon and make purchases from the site without leaving TikTok.
“The Select Committee conveyed to Amazon that it is dangerous and unwise for Amazon to partner with TikTok given the grave national security threat the app poses,” the spokesperson said. The parties met in September, according to Bloomberg, which first reported the news.
Representatives from Amazon and TikTok did not immediately respond to CNBC’s request for comment.
TikTok’s future viability in the U.S. is uncertain. In April, President Joe Biden signed a law that requires ByteDance to sell TikTok by Jan. 19. If TikTok fails to cut ties with its parent company, app stores and internet hosting services would be prohibited from offering the app.
President-elect Donald Trump could rescue TikTok from a potential U.S. ban. He promised on the campaign trail that he would “save” TikTok, and said in a March interview with CNBC’s “Squawk Box” that “there’s a lot of good and there’s a lot of bad” with the app.
In his first administration, Trump had tried to implement a TikTok ban. He changed his stance around the time he met with billionaire Jeff Yass. The Republican megadonor’s trading firm, Susquehanna International Group, owns a 15% stake in ByteDance, while Yass has a 7% stake in the company, NBC and CNBC reported in March.
— CNBC’s Jonathan Vanian contributed to this report.
Technology
Amazon launches fixed pricing for treatment of conditions such as hair loss. Hims & Hers stock drops 15%
Former U.S. Army intelligence analyst Chelsea Manning says censorship is still “a dominant threat,” advocating for a more decentralized internet to help better protect individuals online.
Her comments come amid ongoing tension linked to online safety rules, with some tech executives recently seeking to push back over content moderation concerns.
Speaking to CNBC’s Karen Tso at the Web Summit tech conference in Lisbon, Portugal, on Wednesday, Manning said that one way to ensure online privacy could be “decentralized identification,” which gives individuals the ability to control their own data.
“Censorship is a dominant threat. I think that it is a question of who’s doing the censoring, and what the purpose is — and also censorship in the 21st century is more about whether or not you’re boosted through like an algorithm, and how the fine-tuning of that seems to work,” Manning said.
“I think that social media and the monopolies of social media have sort of gotten us used to the fact that certain things that drive engagement will be attractive,” she added.
“One of the ways that we can sort of countervail that is to go back to the more decentralized and distribute the internet of the early ’90s, but make that available to more people.”
Nym Technologies Chief Security Officer Chelsea Manning at a press conference held with Nym Technologies CEO Harry Halpin in the Media Village to present NymVPN during the second day of Web Summit on November 13, 2024 in Lisbon, Portugal.
Horacio Villalobos | Getty Images News | Getty Images
Asked how tech companies could make money in such a scenario, Manning said there would have to be “a better social contract” put in place to determine how information is shared and accessed.
“One of the things about distributed or decentralized identification is that through encryption you’re able to sort of check the box yourself, instead of having to depend on the company to provide you with a check box or an accept here, you’re making that decision from a technical perspective,” Manning said.
‘No longer secrecy versus transparency’
Manning, who works as a security consultant at Nym Technologies, a company that specializes in online privacy and security, was convicted of espionage and other charges at a court-martial in 2013 for leaking a trove of secret military files to online media publisher WikiLeaks.
She was sentenced to 35 years in prison, but was later released in 2017, when former U.S. President Barack Obama commuted her sentence.
Asked to what extent the environment has changed for whistleblowers today, Manning said, “We’re at an interesting time because information is everywhere. We have more information than ever.”
She added, “Countries and governments no longer seem to invest the same amount of time and effort in hiding information and keeping secrets. What countries seem to be doing now is they seem to be spending more time and energy spreading misinformation and disinformation.”
Manning said the challenge for whistleblowers now is to sort through the information to understand what is verifiable and authentic.
“It’s no longer secrecy versus transparency,” she added.
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