[News] U.S. Chip Export Ban to China May Extend to 16nm Before Biden Leaves Office

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According to a report from Economic Daily News, the U.S. is reportedly preparing to tighten chip export controls on China. Before the end of President Biden’s term, and potentially as early as the 10th, the U.S. may announce stricter export restrictions on AI and advanced chips to China. Furthermore, industry sources indicate that the U.S. is expected to expand the scope of restricted processes, extending controls beyond the current 7nm advanced processes to include 16nm mature processes. As noted in the report, foundries that depend on orders from Chinese customers are expected to face even greater challenges.

The U.S. has been committed to curbing China’s advancements in AI and semiconductor technologies; thus, tighter export controls on advanced chips from companies like NVIDIA and AMD come as no surprise. However, expanding these controls to include 16nm processes could introduce a different level of challenges for the industry, as highlighted in the report citing sources.

The report notes that imposing export restrictions on mature process chips would impact a larger number of companies, more applications, and greater order volumes, potentially triggering a new wave of disruptions in the global foundry and semiconductor industries.

Speculation about whether TSMC might be affected by the rumored new export controls has raised concerns. The report notes that TSMC is set to hold its earnings call on the 16th and is currently in a quiet period ahead of the event.

According to TSMC’s financial report of the third quarter of 2024, 16nm processes accounted for approximately 8% of its revenue. Additionally, the report cites institutional sources, noting that not all of these customers are from China.

Furthermore, given the growing revenue contributions from TSMC’s advanced 3nm and 5nm processes, industry sources cited by Economic Daily News believe that even if U.S. controls are extended to 16nm, the impact on TSMC would likely remain limited and manageable. In contrast, companies like GlobalFoundries, which generate a larger portion of their revenue from 16nm processes, could face more severe consequences.

Meanwhile, citing Bloomberg, the report highlights that the Biden administration is reportedly considering expanding AI chip sales limitations to most global regions, potentially impacting U.S. chip giants like NVIDIA and AMD. Notably, sources told Bloomberg that the regulations would establish a three-tier system of chip trade limitations, aiming to block access to advanced technologies for China and Russia.

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