BIS issues third major round of chip export controls, adds 140 entities

The US Commerce Department’s Bureau of Industry and Security added 140 companies to its Entity List and modified restrictions on 14 more, part of a package of rules intended to further restrict China’s capacity to produce advanced semiconductors for military use. It was the third significant update to the department’s China chip controls, following interim rules issued in October 2022 and updated in October 2023, and a further set of restrictions in April 2024.

The new rules imposed, for the first time, controls on high-bandwidth memory (HBM) — the fast memory chips paired with AI accelerators such as Nvidia’s, and a component China’s own chipmakers had not yet mastered at scale. Both US-origin HBM and foreign-made HBM built using US technology fell under the restriction via the department’s foreign direct product rule, extending US jurisdiction to chips manufactured entirely outside the United States if they relied on covered American technology or software. The rules also added controls on 24 categories of semiconductor manufacturing equipment — covering etching, deposition, lithography, ion implantation, annealing, metrology, inspection and cleaning tools — and three categories of chip-design and production software.

Commerce Secretary Gina Raimondo said “no administration has been tougher in strategically addressing China’s military modernization through export controls,” and Under Secretary Alan Estevez described the package as “proactive and innovative” in response to increasingly sophisticated efforts by Chinese firms to route around earlier restrictions, including through shell companies and third-country intermediaries.

The rule was the last major chip-control action of the Biden administration, arriving roughly seven weeks before the January 2025 AI Diffusion Rule, which attempted a broader tiered system governing which countries could receive advanced AI chips at all — a rule the incoming Trump administration later rescinded. The December 2024 controls were narrower in scope than the diffusion framework but addressed a gap, HBM, that earlier rounds had left open even as it became a recognised bottleneck for training large AI models.