US adds HBM controls and 140 Chinese entities

Background

On 2 December 2024, the US Bureau of Industry and Security (BIS) announced a package of rules intended to limit China's ability to produce advanced-node semiconductors for military applications and artificial intelligence ^[1]. BIS described the action as the third large-scale strike on China's semiconductor industry by the Biden administration since 2022 ^[3]. The stated focus was advanced-node production for military applications and AI ^[1].

What the package covers

The package added controls on 24 types of semiconductor manufacturing equipment and three types of software tools used to develop or produce semiconductors ^[1][3]. For the first time, BIS imposed controls on high-bandwidth memory (HBM), adding ECCN 3A090.c to cover HBM with a memory bandwidth density greater than 2 GB per second per square millimetre ^[3][4]. BIS said HBM is critical to AI training and large-scale inference and is a key component of advanced computing integrated circuits ^[1]. The HBM control is defined by memory bandwidth density, with the threshold written into ECCN 3A090.c ^[3][4]. These controls did not stand alone: they were announced together with entity-list changes and new foreign direct product rules ^[1][3][4].

Entity List additions

The rules added 140 entities to the Entity List and modified 14 existing entries, covering Chinese tool makers, semiconductor fabs and investment companies ^[1][2]. Among the listed companies were Naura, Piotech, ACM Research's China operations, SiCarrier, Wingtech and Swaysure ^[3]. BIS also listed two chip investment firms, Wise Road Capital and Jianguang Asset Management, for the first time ^[3]. The 140 additions and 14 modifications were part of the same package ^[1][2]. The listed categories show that the package reached beyond chip fabs to tool suppliers and investors ^[1][2].

New rules and timing

BIS created two new foreign direct product rules, one for semiconductor manufacturing equipment and one tied to Entity List footnote 5, and set a 0% US content de minimis threshold for them ^[3][4]. Such rules extend controls to certain items produced outside the United States when they are tied to US technology or software. The new HBM, equipment and software controls took effect on 31 December 2024, while the red-flag guidance and software key controls took effect immediately on 2 December 2024 ^[3]. The public comment period ran until 31 January 2025 ^[3]. The effective dates split the package into immediate and later parts ^[3].

Why it matters

The package put HBM, chipmaking equipment, software tools and entity-list actions into one set of announced rules ^[1][3][4]. HBM had not previously been covered by BIS controls, making ECCN 3A090.c a first-time step for this type of memory ^[3][4]. The Entity List additions reached tool makers, fabs and investment companies, and two chip investment firms were listed for the first time ^[1][2][3]. The two foreign direct product rules and the 0% de minimis threshold set the scope for the equipment rule and the footnote 5 rule ^[3][4]. BIS described the package as the third large-scale strike on China's semiconductor industry by the Biden administration since 2022 ^[3]. Taken together, the measures combine memory, equipment, software and entity-list tools in one announced package, with the stated focus on limiting advanced-node semiconductor production for military applications and AI ^[1][3].