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Secretary of Commerce Gina Raimondo testifies before the Senate Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies on Capitol Hill in Washington, D.C., US, February 1, 2022.
Andrew Harnick | Reuters
As reports swirl about possible US restrictions on semiconductor exports to China, a small department within the sprawling Ministry of Commerce is playing a big role.
Commerce Secretary Gina Raimondo described the Bureau of Industry and Security in 2021 as the “small but mighty” agency at the center of federal national security efforts. This is especially true now, as President Biden contemplates tougher controls on the export of powerful AI computing chips to the world’s second-largest economy.
The Bank for International Settlements is responsible for implementing the US export control regime, preventing defense and high-tech products from falling into the wrong hands of companies or governments. Decisions made by the Bank for International Settlements about who has access to US technology and who does not can have a significant impact on corporate earnings.
Chipmakers have already been hurt by the restrictions imposed by the Bank for International Settlements. In 2022, Nvidia’s Bank for International Settlements warned that new licensing requirements prevented the company’s advanced A100 and H100 chips from being exported to China without obtaining a license from the Commerce Department, part of the Biden administration’s overall effort to curb Chinese technological advances.
nvidia He warned in August 2022 that about $400 million in potential Chinese sales would be lost unless customers purchased “alternative product offerings.” Just a few months later, Nvidia began offering a watered-down version of its flagship AI chip to the Chinese market. Dubbed the A800, its lower specs exempted it from the Department of Commerce’s licensing requirements.
But the Wall Street Journal reported on Wednesday that even Nvidia’s less powerful offering could be restricted from exporting at President Biden’s direction. The Bank for International Settlements declined to comment on the possibility of tightening export controls. Nvidia shares, which have risen 180% this year largely on the AI hype, fell 2% after the Wall Street Journal story.
Through its Trade Watch List, BIS can determine product specifications that require licenses to be sold abroad. The standards can be so specific that only a few commercially available items apply.
Although the list of control is not intended to single out any single vendor, there are very few companies that are developing the kind of high-octane processors that power AI models. nvidia f AMD lead that group.
If export restrictions are implemented, these companies will be responsible for ensuring that their high-tech processors do not reach the Chinese market.
In one high-profile enforcement case, the Office for International Settlements targeted a hard drive manufacturer Seagate On the company’s decision to continue supplying Huawei after the Chinese company was blacklisted in 2020. Seagate He was fined $300 million by the government. But the financial impact was much greater, as Seagate had a $1.1 billion business in China.
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