TMTPOST -- The Trump administration is gearing up tougher restrictions on China’s semiconductor exports and pressing U.S. allies to tighten their curbs, according to a latest report.
Credit：Pixabay
The Trump team is planning tougher semiconductor restrictions on China, and some officials were in early talks to further restrict the quantity of artificial intelligence (AI) chips that can be exported to globally without a license, Bloomberg reported on Tuesday, citing people with knowledge of the matter.
It was reported that U.S. government officials also recently met with their Japanese and Netherlands counterparts about limiting Tokyo Electron Ltd. and ASML Holding NV engineers from maintaining semiconductor gear in China. Washington aims to let allies in align with U.S. existing curbs that are applied to American chip-gear companies such as Lam Research Corp. and Applied Materials Inc.
The further AI chip curbs are set to hit U.S. companies especially Nvidia Corporation, a big beneficiary of the AI boom these years. Neither Nvidia, Japan's Ministry of Economy, Trade and Industry (METI), and the Dutch foreign ministry commented on the report, but the news sparked sellout of semiconductor shares.
Nvidia shares fell 2.8% on Tuesday. The PHLX Semiconductor Index (SOX) , a Philadelphia Stock Exchange capitalization-weighted index composed of the 30 largest U.S. companies primarily involved in the design, distribution, manufacture, and sale of semiconductors, settled 2.3% lower that day. Tokyo Electron shares shed 4.9% and Netherlands-listed shares of ASML finished 2.2% lower.
Nvidia was reported late January the Trump administration officials are exploring extra curbs on the sale of Nvidia chips to China after Chinese upstart DeepSeek’s sudden rise.
The reported possible measure that officials focused on is to expand restrictions to cover Nvidia H20 chips, which can be used to run AI software and were designed to comply with existing U.S. restrictions on China imposed by the Biden administration. H20 chips, the scaled-down offering tailored for China, are Nvidia’s response to regulations introduced by the U.S. Department of Commerce's Bureau of Industry and Security (BIS) in October 2023. These regulations impose stricter export controls on semiconductor products, including Nvidia's high-performance AI chips.
Two lawmakers late January called on the Trump administration to weigh export curbs on Nvidia’s H20 and chips of similar sophistication for national security, alleging DeepSeek has extensively leveraged H20 chips to launch its AI model released recently.
In their letter to National Security Advisor Michael Waltz, Chairman John Moolenaar, a Republican, and Ranking Member Raja Krishnamoorthi, a Democrat, of a House committees focusing on the Sino-U.S. competition, asked for the move as part of a review ordered by Trump to scrutinize the U.S. export control system in light of "developments involving strategic adversaries."
The U.S. Department of Commerce is investigating whether Deepstart has been using American chips that are banned from export to China, Reuters reported late January. It was said that chip smuggling to China has been tracked out of countries including Malaysia, Singapore and the United Arab Emirates. Following Reuters, Bloomberg’s sources revealed the Commerce Department is looking into if DeepSeek obtained advanced Nvidia chips through third parties in Singapore, which is deemed as evasion of restrictions.
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