US to tighten China chip squeeze with old Cold War rule

The United States plans to expand a Cold War-era rule to stop China from obtaining restricted chip-making tools and high-end chips from places including Israel, Singapore, Malaysia and Taiwan.

The Biden administration is set to expand the coverage of its Foreign Direct Product Rule (FDPR), which was first introduced in 1959 to control the trading of US technologies, by the end of this month, Reuters reported on Wednesday (July 31).

However, the United States’ allies, including Japan, the Netherlands and South Korea, all key producers and suppliers of chip-manufacturing tools, will not be affected by the change, the same report said.

The Biden administration may also use the FDPR to stop China from getting high-bandwidth memory (HBM) chips made by SK Hynix and Samsung Electronics and equipment capable of making those chips, Bloomberg reported, citing named sources.

The report said the new FDPR, if enacted, would block the shipment of the HBM2 and more advanced chips including the HBM3 and HBM3E, all of which can be used as artificial intelligence (AI) accelerators.

It said US-based Micron Technology also produces HBM chips but it will not be affected by the new rule as the company has refrained from selling its HBM products to China after its memory chips were banned from being used in the country’s critical infrastructure in 2023.

“Containing and going after China will not stop China’s development, but will only make China even more determined and capable in boosting our own strength in technology and innovation,” Lin Jian, a Chinese foreign ministry spokesperson, said in a media briefing on Wednesday.

“We hope relevant countries will firmly resist the coercion and jointly uphold a fair and open international trade