Daily: China sanctions semiconductor, rare earths exports
9 min read.
Highlights
China sanctions semiconductor, rare earths exports. China unveiled a slate of new export restrictions on rare earths and related products, which includes semiconductors. Semiconductors, including logic chips 14nm and below, memory chips 256-layer and above, and related chipmaking equipment will now be reviewed by China’s Ministry of Commerce (MOFCOM) on a case-by-case basis. Any exports with military uses is expected to not be approved. The rare earths sanctions is a real chokepoint as China holds an effective monopoly. It is a pretty dramatic escalation of events. The series of US-China trade negotiations centred around getting China to resume the flow of rare earths. If that recent history repeats itself, we will likely see reciprocal sanctions on goods that the US has leverage over, such as advanced semiconductors, before many high-level meetings and hopefully a quick detente.
At the same time, China sanctioned several individual firms, including Canadian research firm TechInsights, which previously exposed sanctioned chip technology inside Huawei’s AI chips.
US approves chip sales to UAE. The US approved a multibillion dollar chip sale to US companies operating in the UAE. The US-UAE chip deal was reportedly struggling to get off the ground, months after the formal agreement. US legislators are trying to limit foreign purchases of AI chips by prioritising domestic firms, so the latest approval does not include Middle Eastern companies like Abu Dhabi’s G42.
Intel launches latest chip, Panther Lake. Intel announces that their latest AI chip, the Panther Lake, is in full mass production. It is fabbed on 18A technology in Arizona, making it the most advanced node to be mass produced. The node is primarily used for in-house chip production, but the Panther Lake could be a critical test for other companies to see how effective the production line is.
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1. Policy and Geopolitics
1.1
WSJ (10/09): China Tightens Grip on Rare Earths Ahead of Expected Trump-Xi Meeting
China tightened its control over sectors crucial to making high-tech products including electric vehicles and jet fighters, threatening to reignite trade tensions with the U.S. ahead of an expected meeting between President Trump and Chinese leader Xi Jinping.
China’s Commerce Ministry said Thursday that foreign suppliers must obtain approval from Beijing to export some products with certain rare-earth materials originating from China if they account for 0.1% or more of the good’s total value. Goods produced with certain technologies from China are also subject to the export controls. Both restrictions apply to products manufactured outside of China.
Export applications for products with military uses generally won’t be approved, the ministry said, adding that licenses related to semiconductors or artificial-intelligence development will be granted on a case-by-case basis.
1.2
TrendForce (10/09): China Expands Rare Earth Curbs, Subjects 14nm Logic and 256-Layer Memory to Case-by-Case Review
The new rules, which have raised immediate concerns, require case-by-case reviews for semiconductors and AI, as per the announcement by China’s Ministry of Commerce. Notably, export applications involving 14nm-and-below logic chips, 256-layer-and-above memory chips, related manufacturing and testing equipment, and AI tech with potential military use will now be scrutinized by MOFCOM to prevent sensitive technology from falling into the wrong hands.
TrendForce notes that China’s latest rare earth export restriction will impact HDD production of Seagate and WDC, as the spindle motors rely on these materials.
1.3
Bloomberg (10/09): China Blacklists Researcher That Exposed Huawei Chip Secrets
China has added prominent research firm TechInsights to its Unreliable Entity list, shutting out the Canadian teardown specialist that helped expose the inner workings of Huawei Technologies Co.’s AI chips.
TechInsights will be barred from doing business with organizations or individuals in China, alongside a raft of other companies including some drone providers, according to a Ministry of Commerce statement on Thursday.
1.4
Bloomberg (10/09): Trump Team Approves Nvidia Chip Sales for US Projects in UAE
The US has approved several billion dollars’ worth of Nvidia Corp. chip exports to American customers including Oracle Corp. for use in projects in the United Arab Emirates, an initial step in implementing a controversial deal that could serve as a blueprint for President Donald Trump’s AI statecraft.
The Commerce Department’s Bureau of Industry and Security recently issued the Nvidia export licenses under the terms of a bilateral AI agreement hashed out in May, according to people familiar with the matter, who requested anonymity so they could discuss a sensitive issue.
The people declined to specify all the customers, but did say that the approved shipments are for American companies — including Oracle — operating facilities in the Gulf nation. Permits were not issued for Nvidia shipments to local customers such as Abu Dhabi AI juggernaut G42.
1.5
Bloomberg (10/09): Germany to Spend €3 Billion in Chip Funding on Roads Instead
The German government is scaling back financial aid for its semiconductor industry, cutting planned subsidies by €3 billion ($3.5 billion) over the next few years as it seeks to overhaul aging infrastructure.
The money will be spent instead to repair streets and bridges, German Vice Chancellor Lars Klingbeil said during a press conference Thursday. Germany’s previous government had earmarked €15 billion to support the chip industry from 2025 to 2028.
The reallocation is a blow to Germany’s efforts to reclaim a prominent role in the global semiconductor industry and reduce reliance on Asian suppliers. The strategy has already suffered major setbacks, including Intel Corp. canceling plans for a €30 billion factory in the eastern town of Magdeburg as the chipmaker sought to cut costs.
2. Economy, Finance, and Business
2.1
SCMP (10/09): China’s top DRAM maker CXMT edges closer to mainland IPO amid AI memory chip supply crunch
ChangXin Memory Technologies (CXMT), China’s top DRAM chipmaker, is taking a step closer to a mega initial public offering (IPO) on the mainland, as the high-end memory chip market experiences supply shortages amid the global artificial intelligence frenzy.
CXMT had “resolved issues” related to the election of employee representative directors and the identification of state-owned shareholders, according to a statement on the website of the China Securities Regulatory Commission (CSRC).
2.2
TrendForce (10/09): Huawei Reportedly Hires Over 300 Korean R&D Experts as China Steps Up Tech Talent Hunt
More than 300 South Korean R&D professionals were employed at Huawei as of this June, underscoring a growing trend of Korean science and engineering talent seeking new opportunities in China. Sources emphasized that these individuals are not ethnic Koreans of Chinese descent, but South Korean nationals mainly educated in Korea.
Sources cited in the report point out that many of these Koreans are active professionals rather than retirees or soon-to-retire scientists, challenging the long-held perception that only those nearing the end of their careers move to China.
In addition, the report notes that the migration of South Korean science and engineering talent to China is increasingly seen as being driven not only by high salaries, but also by an environment that strongly values technical expertise.
2.3
Bloomberg (10/10): Microsoft Forecasts Show Data Center Crunch Persisting Into 2026
Microsoft Corp.’s data-center crunch will continue for longer than the company has previously outlined, underscoring the software giant’s struggles to keep up with cloud demand.
Many of Microsoft’s US data center regions are experiencing shortages of physical space or servers, according to people familiar with the company’s internal forecasts. New subscriptions for Azure cloud services are restricted in some crucial server-farm hubs, including Northern Virginia and Texas, through the first half of next year, said the people who requested anonymity to discuss internal forecasts.
That’s a longer time frame than the company has previously outlined. In July, Chief Financial Officer Amy Hood said current constraints would continue through the end of 2025. The lack of capacity affects machines running graphics processing units typically used for artificial intelligence as well as data centers dominated by central processing units that have long been the workhorse chips for traditional cloud services, the people said.
2.4
Reuters (10/09): TSMC posts forecast-beating Q3 revenue surge on AI boom
TSMC, the world’s largest contract chipmaker, reported on Thursday third-quarter revenue rose 30% year-on-year, beating the market forecast, as demand for the company’s products leapt on surging interest in artificial intelligence applications.
Revenue for July-September came in at T$989.92 billion ($32.47 billion), according to Reuters calculations, compared with T$759.69 billion in the year ago period.
2.5
Reuters (10/10): Applied Digital beats revenue estimates as AI demand fuels data center growth
Applied Digital topped Wall Street estimates for first-quarter revenue on Thursday, driven by surging demand for its data center services as more customers scale up computing to support fast-growing generative AI applications.
Shares of the company rose 3.3% in extended trading.
2.6
Nikkei (10/09): Tokyo Electron aims to boost US manufacturing to same level as Japan
Tokyo Electron, Japan’s largest semiconductor equipment maker, plans to expand its U.S. manufacturing footprint to be on par with operations in its home market as AI demand and Washington’s on-shoring efforts bring more chip production to America.
3. Technology
3.1
Bloomberg (10/09): Intel Debuts New Technology in Make-or-Break Moment for CEO’s Turnaround Bid
Intel Corp., the embattled chipmaker now backed by the US government, introduced new products and manufacturing technology that are central to its turnaround bid.
The company announced Thursday that its Panther Lake processor designs are in full production and will go on sale in laptops early next year. The new chips are made with 18A technology, which Intel says offers advantages that none of its competitors can match yet.
The unveiling follows a furious six-month stretch for Chief Executive Officer Lip-Bu Tan. After taking the job in mid-March, he’s tried to shake up Intel while also seeking outside help. The US government has become the chipmaker’s biggest investor as part of an unconventional deal brokered by the White House, and Nvidia Corp. and SoftBank Group Corp. have acquired multibillion-dollar stakes.
The Panther Lake design builds on its predecessors’ strengths and eliminates their shortcomings, Intel executives said at a company event in Arizona. The processors will more readily balance a PC’s need to run demanding software, such as AI models, without rapidly draining batteries.
3.2
JoongAng Daily (10/10): Samsung’s Exynos to return in Galaxy S26, but still falls short of Snapdragon in test
The long-anticipated comeback of Samsung Electronics’ Exynos mobile processor, likely to power the upcoming Galaxy S26 series, will be a significant test of the company’s chipmaking capabilities and a strategic move to cut costs and dependence on Qualcomm. In the first half alone, the Korean electronics giant spent 7.8 trillion won ($5.5 billion) for purchasing mobile application processors — the bulk of which went to San Diego-based Qualcomm, as the Galaxy S25 series relied heavily on the U.S. chipmaker’s Snapdragon platform.
3.3
TrendForce (10/10): China Launches Fully In-House 12-Inch SiC Pilot Line, Reportedly Marking 100% Equipment Localization
Zhejiang Jingsheng Mechanical & Electrical recently confirmed during its investor relations event that the company’s first 12-inch silicon carbide (SiC) substrate processing pilot production line was officially commissioned on September 26, 2025, at its subsidiary SuperSiC. As the report notes, the key breakthrough of this pilot production line is the full in-house development and 100% localization of equipment across all stages.
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