New U.S. Regulations Introduced to Curb China’s Chipmaking Industry

It is reported that after the introduction of the most stringent new regulations in the United States, U.S. chip toolmaker KLA Corp (KLAC.O) has ceased offering some supplies and services from October 12th, 2022 to China-based customers including South Korea’s SK Hynix (000660.KS) in compliance with the regulations.

 The Biden administration published a sweeping set of export controls on high-end chips and chip manufacturing equipment on October 7th, aimed at preventing China from stealing U.S. technology to advance its military development. Prohibited products can be used to develop artificial intelligence and the resources needed for supercomputing, which are key to modern weapon system technology.

 A source revealed that staff in China received an email from KLA’s legal department stating that from October 12th, the company would stop sales and service to “”advanced fabs”” in China for technology of NAND chips with 128 layers or more, and DRAM chips 18nm and below, and advanced logic chips.

 Two of China’s leading memory chip makers, Yangtze Memory Technology Co Ltd (YMTC), Changxin Memory Technology Co Ltd (CXMT), and contract chip maker Semiconductor Manufacturing International Corp (SMIC) are all affected by the U.S. export control.

 The company would also cease supplying Chinese chip plants owned by Intel and SK Hynix, the world’s second-largest memory chip maker, the source added.