Chinese chip designers slow down processors to dodge US sanctions – CNET – ApparelGeek

Alibaba and start-up Biren Technology are tweaking their most advanced chip designs to reduce processing speeds and avoid U.S. sanctions aimed at suppressing Chinese computing power.

Alibaba, Biren and other Chinese design houses have spent years and millions of dollars creating the blueprints for advanced processors to power the country’s next generation of supercomputers, artificial intelligence algorithms and data centers. These are produced overseas by the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing.

But sanctions announced by Washington last month that cap the processing power of any semiconductor shipped to China without a license have undermined their ambitions.

Alibaba and Biren had already carried out expensive tests of their latest chips at TSMC when Washington unveiled the orders. The rules have forced companies to halt production and change their designs, according to six people briefed on the situation.

They mark another blow for Alibaba, the technology group founded by billionaire Jack Ma. Its shares have lost 80% of their value since Beijing canceled the IPO of sister group Ant two years ago. The group’s new chip was to be its first graphics processing unit and was about to be unveiled, according to three people familiar with the matter.

U.S. export controls extend to third-country chipmakers, as nearly all semiconductor fabs use U.S. components or software, meaning the rules can amount to an embargo on all high-end processors entering China. Washington had previously restricted such imports from California chip companies Nvidia and AMD.

Meanwhile, China’s own chip factories may be decades away from producing cutting-edge chips such as those designed by Alibaba and Biren.

Analysts said Washington’s sanctions, of which restrictions on high-end processors are a part, were aimed at forcibly slowing the development of China’s tech sector.

“Trying to freeze a country in place for a technology level of hardware is a big deal,” said Paul Triolo, head of technology policy at consulting group ASG. “That’s what the United States is trying to do by limiting sales and closing the manufacturing roadmap to reach these advanced levels of hardware.”

Triolo said high-end processors are the building blocks of supercomputing and AI research, powering everything from autonomous driving to drug discovery. “If Commerce doesn’t issue licenses, then China has a real problem,” he said.

However, the U.S. Commerce Department was unlikely to grant such licenses, said Kevin Wolf, export control expert at Akin Gump. “This part of the rule states that such requests will be ‘presumed denied,'” he said.

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Chinese chip designers slow down processors to dodge US sanctions – CNET – ApparelGeek

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