Egypt Daily News – In a move reflecting the new U.S. administration’s direction to tighten restrictions on China’s technology sector, Trump tightens chip restrictions on China, signalling a new chapter in the tech war and working on expanding sanctions against Chinese chip companies while limiting the ability of Japanese and Dutch firms to maintain advanced equipment within China.
The U.S. officials recently held meetings with their counterparts from Japan and the Netherlands to discuss ways to prevent engineers from Tokyo Electron and ASML Holding from providing maintenance services for semiconductor manufacturing equipment in China, according to informed sources.
These efforts aim to push allies toward adopting similar restrictions to those imposed by Washington on its domestic companies, such as Lam Research, KLA, and Applied Materials.
Meanwhile, discussions are underway in Washington regarding imposing sanctions on specific Chinese companies. Some officials are also pushing for additional restrictions on Nvidia chips that are currently allowed to be exported to China without a license, as Bloomberg previously reported. Additionally, the U.S. team is exploring reducing the globally permitted quantities of AI chips that can be exported without prior authorization.
Markets React and Losses in the Semiconductor Sector
Following Bloomberg’s report on the new U.S. plans, shares of Japanese chip companies declined, with Tokyo Electron’s stock dropping by 4.9%. In contrast, Nvidia’s shares saw little change in early trading on Tuesday.
It appears that the new U.S. administration is moving to continue the restrictions initiated during President Joe Biden’s tenure but at a stricter pace. In some cases, it seeks to revive agreements that were not completed under the previous administration, while adopting more hardline positions that some members of Biden’s team were unable to reach internal consensus on.
Bypassing Sanctions, China Seeks Alternatives
Despite U.S. restrictions, Chinese companies have found alternative ways to acquire advanced semiconductors. Bloomberg revealed last month that U.S. authorities are investigating the possibility that the Chinese AI startup DeepSeek obtained Nvidia’s advanced chips through third parties in Singapore, allowing it to circumvent export controls.
New Restrictions on the Horizon
It may take months before these discussions translate into new regulations, especially as Trump continues to appoint officials to key government institutions. The stance of U.S. allies remains unclear; the Biden administration had reached a preliminary agreement with the Netherlands to limit equipment maintenance in China, but the Dutch government backtracked after Trump’s election victory, according to former Biden administration officials.
As part of a stricter policy, the new team is considering banning the Chinese company ChangXin Memory Technologies from accessing U.S. technology—an action previously discussed by the Biden administration but not implemented due to Japan’s opposition.
Additionally, some officials are planning further restrictions on SMIC, Huawei’s main semiconductor supplier, fearing that the current framework allows the company to acquire equipment that could be used in restricted facilities. SMIC shares closed down 1.45% in Hong Kong.
Global Impact and repercussions for Nvidia and Data Centers
The new administration is closely monitoring the “AI Expansion Rule,” which was adopted in the final week of Biden’s presidency. This rule categorizes countries into three groups and sets maximum computing power limits on exports to each.
The rule has drawn sharp criticism from tech companies, including Nvidia, whose CEO Jensen Huang has expressed hope that the Trump administration will adopt a less restrictive regulatory approach.
According to Bloomberg, the White House is exploring ways to modify and strengthen this regulatory framework. Some officials have proposed lowering the computing power threshold for exports without a license, which could expand the restrictions imposed on chip manufacturers.
