US to ‘choke off’ China’s access to key computer chips

President Joe Biden’s Commerce Department will hit China with new restrictions on shipments of semiconductors to China next month.

New Commerce Department regulations will require further licenses for computer chip giants like Nvidia Corp and Micro Devices to deliver chips to China, particularly powerful artificial intelligence chips, Reuters reported Monday. The Biden administration is reportedly in the process of drafting letters informing relevant companies of the regulations changes.

The final letters may include additional actions against China, according to Reuters. The Commerce Department resorts to such letters as a means of getting around the formal regulation process, but in such cases, the changes only affect companies directly contacted by the department.

“The strategy is to choke off China and they have discovered that chips are a choke point. They can’t make this stuff, they can’t make the manufacturing equipment,” Jim Lewis, a technology expert at the Center for Strategic and International Studies, told Reuters. “That will change.”

The Biden administration is tightening its grip on semiconductors as China continues to distance itself from the Western coalition. Chinese leader Xi Jinping is facing staunch criticism for his increasingly aggressive actions toward Taiwan.

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US to ‘choke off’ China’s access to key computer chips

SANTA CLARA, CALIFORNIA – MAY 25: A sign is posted at the Nvidia headquarters on May 25, 2022 in Santa Clara, California. Semiconductor maker Nvidia will report first quarter earnings today after the closing bell. (Photo by Justin Sullivan/Getty Images / Getty Images)

Vladimir Putin and Xi Jinping

Russia’s President Vladimir Putin (L) and his Chinese counterpart Xi Jinping pose during a meeting. (Alexei Druzhinin\TASS via Getty Images / Getty Images)

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The leader is also scheduled to meet with Russian President Vladimir Putin in Kazakhstan this week, the first time he has left China in more than two years. Putin himself is an economic pariah for the West due to his ongoing invasion of Ukraine.

The two countries are the leading global opponents of Western power, and Xi has sought to establish himself as the autocratic counterpart to the U.S. 

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Biden has stated that the competition between the U.S. and China will determine whether the world turns toward democracy or autocracy.

https://www.foxbusiness.com/economy/us-choke-off-chinas-access-key-computer-chips