The new U.S. administration under Donald Trump is preparing to tighten chip controls on China, according to reporting cited by THE DECODER. The focus is not only on shipping advanced chips, but also on the services and rules that keep semiconductor production running.
Recent talks between U.S., Japanese, and Dutch officials centered on limiting maintenance work by Tokyo Electron and ASML at Chinese chip factories, according to Bloomberg. That detail matters because the source says the equipment quickly loses precision without regular service.
Why maintenance has become part of the chip controls debate
Export controls often sound like a question of whether a product crosses a border. In this case, the reported discussions show a broader approach. The equipment already inside Chinese chip factories still depends on outside maintenance to stay accurate enough for demanding semiconductor production.
Tokyo Electron and ASML are central to the reported discussions because their maintenance work is described as crucial. If service becomes harder to obtain, the impact would not be limited to future purchases. It could affect how reliably existing equipment performs over time.
This is why the new push could be significant even if it does not begin with a simple ban on a finished chip. The reported strategy targets the ecosystem around chipmaking: equipment, service, export licenses, and the flow of computing power.
Trump's team is building on Biden's approach
The source describes Trump's team as continuing Biden's overall approach while pressing for stricter measures. That means the policy direction is not presented as a full break from the prior administration. Instead, the reported shift is toward tightening the same broad framework.
The administration is discussing sanctions against Chinese companies like ChangXin Memory Technologies. It also plans to tighten restrictions on Semiconductor Manufacturing International Corp (SMIC), which the source identifies as Huawei's primary chip partner.
Additional export controls on Nvidia chips to China are also under consideration, as reported in late January. Taken together, these moves would place pressure on multiple parts of China's semiconductor industry rather than only one company or one product category.
The stated goal, according to the source, is to prevent China from building its own semiconductor industry that could enhance its AI and military capabilities. That gives the policy a strategic frame: chip controls are being treated as part of a wider contest over AI development and security-sensitive computing power.
The AI diffusion rule is also under review
The Trump administration is also reviewing the AI diffusion rule introduced by Biden's team in their final week. The rule divides the world into three categories, with access to U.S. AI technology depending on where a country falls.
- A group of 18 close allies, including Germany, Japan, and the UK, has unrestricted access to U.S. AI technology.
- About 120 other countries, including Israel and Saudi Arabia, are subject to strict quantity limits.
- China, Russia, Iran, and North Korea face complete export bans.
The rule also affects cloud providers such as Microsoft, Google, and Amazon. They can apply for special permits, but the source says they must meet strict security requirements.
Those providers cannot operate more than 50 % of their AI computing power outside the U.S. They are also limited to 7 % of their computing power in any country outside the closest allies.
Trump's White House is considering tightening these rules further. One possibility described in the source is reducing the amount of computing power that can be exported without a license.
At present, chip manufacturers only need to notify the government before exporting up to 1,700 graphics processors to most countries. A tighter rule would make that threshold more restrictive, though the source says the final regulations could take months to implement.
Industry resistance and market signals
The plans have already drawn attention from the chip industry. Nvidia CEO Jensen Huang criticized Biden's regulations, warning that they could threaten U.S. leadership in AI development. He had hoped Trump would take a less restrictive approach.
The market reaction described in the source was mixed. Japanese chip manufacturer stocks fell after Trump's plans became public, with Tokyo Electron dropping 4.4 %. In Hong Kong, SMIC shares recovered, gaining up to 2.7 %, partly due to expected support from Beijing.
Those movements show how investors are reading the policy debate in different ways. Companies tied to equipment and service may face pressure if maintenance restrictions advance. At the same time, expectations of support from Beijing helped SMIC recover in Hong Kong, according to the source.
What happens next
The reported measures are not described as finished rules yet. Final regulations could take months to implement because Trump's appointments to key federal agencies are still pending.
That timing leaves room for details to change. The administration is weighing action across sanctions, equipment maintenance, Nvidia chip exports, SMIC restrictions, and the AI diffusion rule. Each area could affect a different part of the semiconductor and AI supply chain.
For now, the direction is clear from the source: U.S. chip controls on China are likely to become tighter rather than looser. The policy discussion has moved beyond chips alone and now reaches the maintenance, computing power, and licensing systems that support advanced AI development.