Cutting corners: Washington is preparing new rules to ban exports of advanced chipmaking devices to China, a move that could, however, be too little too late as Asian manufacturing companies are already engaged in making sub-14nm semiconductors on their own.

The Biden administration is preparing new, harsher restrictions against the chipmaking industry in China. After a series of so-called “is informed” letters sent earlier this year to a few US companies, the Commerce Department now plans to turn these individual letters into a broader message to China: we won’t let you exploit our superior computer technology and know-how for your own gain.

The letters were sent to KLA Corp, Lam Research Corp and Applied Materials Inc., and they were later confirmed to be authentic. The US Department of Commerce ordered the three companies to stop the export of chipmaking machines and equipment needed to make semiconductor components with sub-14 nanometer processes to China. Only sellers that obtained a proper export license from Washington should keep doing business with Beijing.

The new ban could join those already imposed to Nvidia and AMD over sales of high-performance AI accelerators and GPUs; even worse, at least from China’s point of view, the letters will likely be codified in new rules from the Commerce Department destined to affect the entire US semiconductor industry.

Washington makes use of “is informed” letters to avoid the lengthy rulemaking process and to impose new controls faster, but the restrictions only apply to companies that receive the letter.

The prospect of new export limits is being discussed and actively monitored by Intel and Cerebras Systems, both involved in the production of the similar AI accelerators as sold by Nvidia and AMD. OEM companies like Dell, HPE and Supermicro, are also interested in the new rules as they sell servers equipped with Nvidia’s A100 Ampere GPU.

While the government’s official position hasn’t been revealed yet, a senior official stated that, “as a general rule,” the Commerce Department looks to “codify any restrictions that are in is-informed letters with a regulatory change.” The Biden Administration plans to “choke off” China in their ability to make advanced computing technology without external aid, but the effort could be pointless as the Asian semiconductor giant SMIC has seemingly already been able to produce chips with a 7nm manufacturing process.