US to continue selling chips to China, but not most advanced ones

Gina Raimondo, the US Secretary of Commerce, announced on CNN that the United States ‘will continue to sell chips to China, but not the most powerful ones‘, referring to advanced AI chips. Following a series of measures implemented late last year and early this year, China faces US sanctions with severe restrictions on some AI chips, including those from Nvidia, AMD, and other foreign manufacturers that use US components or equipment.

Why does it matter?

Despite the risks and obstacles, China remains a huge market for US chipmakers. As Washington weighs additional restrictions on chip exports, the US semiconductor industry wants to protect its business in the largest single market, accounting for more than a third of the $555.9 billion global market.
Washington is openly trying to hamper Beijing’s technological and military progress. The Biden administration believes it can maintain America’s technological preeminence by cutting China off from advanced AI chips. However, China is fighting back with its own restrictions and tech giant Huawei is rumoured to have bypassed US sanctions and produced its own advanced chips. If confirmed, it would put into question the impact of current and future US policy towards China and other concerned regions, including the latest one targeting the Middle East.