An updated rule that aims to tighten restrictions on the export of U.S. chipmaking equipment to China is currently in the final stages of review, signaling the Biden administration's intention to further restrict Beijing's access to semiconductor technology. According to a government posting and a source familiar with the matter, the rule is expected to add more restrictions and close existing loopholes in the regulations.

This development follows Reuters' exclusive report on Monday, which revealed that U.S. officials had been warning China in recent weeks to anticipate updated rules on restricting shipments of semiconductor equipment and advanced AI chips to be implemented this month. The initial rules, first unveiled on October 7, 2022, had already strained relations between the two countries and drew strong criticism from Beijing.

The regulation, titled "Export controls to Semiconductor Manufacturing Items, Entity List Modifications," was posted on the Office of Management and Budget (OMB) website on Wednesday. Typically, export control rules are not posted by the OMB until there is consensus among multiple departments, including State, Defense, Commerce, and Energy, regarding their content, according to former officials. Therefore, the posting indicates that there is agreement among these departments on the expected restriction on sending chipmaking tools to China.

Although the posting confirms the new restriction on chipmaking equipment, a companion rule that is anticipated to update restrictions on the export of high-end chips used for artificial intelligence has not yet been posted by the government. However, sources suggest that the Biden administration is aiming to publish both rules simultaneously.

The move to restrict U.S. chip exports to China is part of the broader efforts by the Biden administration to protect American technological advancements and curb Beijing's technological ambitions. By imposing stricter controls on the export of chipmaking equipment and advanced AI chips, the U.S. hopes to limit China's ability to develop its own semiconductor industry and reduce its reliance on American technology.

The spokesperson for the U.S. Department of Commerce declined to comment on the matter, leaving industry players and experts waiting for more details on the specific provisions of the updated rule. Nonetheless, it is clear that the Biden administration is determined to strengthen export controls in the semiconductor sector, signaling a more assertive approach towards China's technological rise.