The US is firing back again in the great China chip wars

The White House may impose new sanctions on several Chinese chip firms linked to Huawei as the chip wars heat up, Bloomberg reported.

• The Biden administration may impose new sanctions on several Chinese chip firms linked to Huawei.
• It's also planning to allocate $8.5 billion in grants to Intel to build chip facilities in the US.
• The moves are all part of US attempts to curb China's industry while boosting its own.

The US took another couple of swings at China in the chip battle between the global superpowers.

The Biden administration is considering imposing sanctions on several Chinese semiconductor firms linked to Huawei Technologies, Bloomberg reported on Wednesday, a year after the Chinese tech giant unveiled its advanced chip to power a new phone.

Meantime at home, the Biden administration was set to announce $8.5 billion of grants to Intel Wednesday, to go into constructing and expanding new chip facilities across the country, the New York Times reported. It's the latest and biggest award the federal government has made as part of a 2022 act to boost US production.

These are the most recent moves by the US in an ongoing effort to curb China's chip industry and push its own semiconductor manufacturing — and AI capabilities — forward. In November 2023, the US Department of Commerce implemented the Advanced Computing Chips Rule, which makes it harder for China to import advanced AI chips from American manufacturers — such as Nvidia's coveted GPUs, which are used to train and power AI models.

But China has also been squeezing the US. Last week, Bloomberg reported that authorities there had started to ask Chinese EV makers to focus their spending on local chipmakers instead of US ones.

And tensions are already impacting US companies. Nvidia has had to ship alternative, less-powerful chips to China, hitting its revenue there. Apple's iPhone sales have slumped in China in early 2024 — partly because it's losing out to Huawei.

According to Bloomberg, US officials have no set deadline to make a final decision on Huawei-linked firms. It may depend on the status of US-Chinese relations in the next few months.

The White House press office didn't immediately respond to Business's request for comment from Business Insider. Neither did Huawei and its alleged proxy firms.