U.S. Chip Curbs Threaten China’s Emerging Manufacturers

Makers of memory chips are among up-and-coming Chinese semiconductor manufacturers that could be hit by new rules

HONG KONG—U.S. restrictions on exports of chips and chip-making equipment to China are likely to deal a setback to some of the country’s fast-emerging semiconductor companies, curbing China’s attempts to catch up with the U.S. in advanced technology.

The rules unveiled Friday by the Commerce Department require a license for U.S. companies to export advanced chips and chip-making equipment key to China’s technological goals, vastly expanding on existing rules restricting the export of advanced technologies to China.

The rules cover the export of chip-manufacturing equipment used to make advanced memory chips—widely used in smartphones, personal computers, data servers and other everyday devices. They also cover equipment used to make basic computing chips used in devices such as PCs, as well as the export of advanced chips themselves.

The full impact of the new rules depends on many factors, including how restrictive U.S. regulators are when it comes to the approval of export licenses for companies that apply for them. Getting foreign allies on board with their own restrictions will be crucial to prevent workarounds, analysts said.

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US, China, microchip