The United States Announces New Regulations on Export Control of AI Chips, with Biren Technology and Moore Threads Listed as Entities

   On October 17th, the Bureau of Industry and Security (BIS) of the US Department of Commerce announced new export control rules for advanced computing chips and semiconductor manufacturing equipment, limiting China's ability to purchase and manufacture high-end chips, and listing two Chinese GPU companies, Moore Thread, Biren Technology, and their subsidiaries on the physical list. The effective date of the Advanced Computing Chip Rules (AC/S IFR) is November 16, 2023, and the deadline for public comments is 60 days from the date of public display of the rules. This rule retains the strict licensing requirements within China implemented on October 7, 2022, and has undergone two types of updates: 1) adjusting and determining whether to restrict the parameters of advanced computing chips; 2) Implement new measures to address the risk of regulatory evasion.

1. Parameter change

   Removed 'interconnect bandwidth' as a parameter for identifying restricted chips. If it exceeds any of the following parameter ranges, the export of the chip will be restricted: 1) the existing performance threshold specified in the October 7th rule; 2) A new 'performance density threshold'. This rule requires notification of the export of certain additional chips with performance slightly below the limit threshold. According to the new "License Exception Notification Advanced Computing (NAC)", after receiving notifications of exports and re exports to Macau, China and areas identified as subject to US arms embargoes, the US government will review and decide within 25 days whether transactions can be made based on license exceptions or require a license. As part of these updates, BIS has also introduced an exemption allowing the export of chips for consumer applications.

2. Preventing evasion

   Establish a global export license requirement for controlled chips for any company headquartered in a US arms embargo area or Macau, or any company whose ultimate parent company is headquartered in Macau, China, to prevent companies from relevant countries and regions from obtaining controlled chips through their overseas subsidiaries and subsidiaries. Create new hazard signals and additional due diligence requirements to help foundry identify restricted chip designs. This will make it easier for wafer fabs to assess whether overseas companies are attempting to evade control over the illegal production of restricted chips through the following methods. Expand the export licensing requirements for advanced chips to all 22 countries where the United States maintains arms embargoes, as well as to Macau, China. Apply licensing requirements for the export of advanced chips and assume approval in response to reports of countries using third countries to transfer or acquire restricted items. This will provide greater compliance monitoring and enforcement visibility. Establish notification requirements for a small number of high-end gaming chips to improve shipment visibility and prevent the misuse of these chips to disrupt US national security. This includes soliciting public opinion on multiple topics, including risks related to Infrastructure as a Service (IaaS) providers, control applications for deemed exports and deemed re exports, additional compliance guidance that can be provided to foundries receiving chip designs, and how to more accurately define key terms and parameters in regulations.

Expand the scope of export controls on chip equipment,

   The effective date of the Provisional Final Rules for Expanding Export Control of Semiconductor Manufacturing Projects (SME IFR) for 21 new countries is 30 days from the date of public inspection on the Federal Register website (excluding the Temporary General License), and the deadline for public consultation is 60 days from the date of public inspection of this regulation. From October 7, 2022 to present, the main changes to this rule include:

1. Apply control to other types of semiconductor manufacturing equipment.

2. Improve and better focus on personnel restrictions in the United States, while compiling existing institutional guidance to ensure that US companies cannot provide support for advanced Chinese semiconductor manufacturing while avoiding unexpected impacts.

3. Expand the licensing requirements for semiconductor manufacturing equipment to other countries outside of China, including 21 other countries where the United States maintains an arms embargo.