Export controls limit Chinese access to Arm chip designs

Chipmakers are looking for ways around the restrictions

Chinese e-commerce giant Alibaba is unable to acquire Arm's most cutting-edge chip designs due to recent UK and US export restrictions.

The Financial Time says Alibaba will not have access to Arm's Neoverse V-series core designs. Allegedly, the British firm thinks the US and the UK governments would not approve the export of the technology to China because its performance is too high.

This is the first known instance in which Arm has determined it could not export its most cutting-edge designs to China.

The USA imposed severe restrictions on the sale of semiconductors to China in October, in an effort to limit Beijing's military and technological capabilities. American manufacturers like Intel and Nvidia are now required to obtain a licence from the US Commerce Department to export chips and equipment to Chinese firms.

The UK has also enacted similar export restrictions in recent months.

Due to these restrictions, chipmakers have been compelled to limit the products they can sell to the Chinese market.

Last month Nvidia unveiled a new advanced chip it claimed was compliant with US export restrictions. The chip, known as the A800, was thought to be the first attempt by a major US chipmaker to circumvent the government controls.

Bloomberg reported this week that the Biden administration intends to put Yangtze Memory Technologies, a Chinese chip manufacturer, and 35 other Chinese companies on a trade blacklist, preventing them from purchasing specific American components.

Arm claims to be fully compliant with the latest export regulations and says it has a process in place to deliver 'optimised solutions' to Alibaba and other China partners, which address their performance needs.

The firm says it is committed to complying with all relevant export rules and regulations in the jurisdictions it operates.

The UK government told the FT it did not comment on specific licence applications, but added it was committed to helping UK firms and academia connect with China in a manner 'that represents the UK's values and takes account of national security concerns.'

Last month Prime Minister Rishi Sunak signalled the end of the 'golden era' of relations between the UK and China.

The servers that run Alibaba's Alibaba Cloud already run on Arm-based processors, made for the firm by T-Head Semiconductor, a fully owned chip-making subsidiary of Alibaba.

However, Arm is unable to sell its cutting-edge chips due to the Wassenaar Arrangement, a 42-country export control arrangement first established in 1996.

The firm told the FT that it was unable to sell its chip designs to China due to the fact they are deemed to be 'US origin' technology, and as such fall under the Wassenaar Arrangement.

Arm introduced Neoverse V2, its next-generation data centre chip technology, earlier this year to meet the explosive growth of data from 5G and internet-connected devices.

A person close to Arm told the FT that the company was working with Alibaba and other Chinese partners to find solutions that would allow them to meet their performance needs while remaining compliant with the latest export controls.