The United States plans to restrict administrative agencies from purchasing Chinese chips such as SMIC, Yangtze River, and Changxin

The United States is planning to further tighten procurement restrictions on Chinese semiconductor products and plans to restrict government agencies from purchasing semiconductor products and services produced by SMIC, Changxin Memory, and Yangtze Memory.According to legal information platform Lexology, the U.S. Federal Acquisition Rules Council (FAR Council) issued a "Notice of Proposed Rulemaking" on February 17.

The notice proposes to amend the Federal Acquisition Rules (FAR) to implement the prohibition on certain semiconductor procurements in Section 5949 of the National Defense Authorization Act for Fiscal Year 2023.

This regulation prohibits administrative agencies from obtaining semiconductor parts, products or services that can be traced to specific Chinese companies, while the "critical system" restrictions are even more stringent, not only prohibiting the direct purchase of chips from these companies, but also including products that use these chips to design, produce or provide related services.

In addition, the rule gives the U.S. Secretaries of Defense and Commerce greater discretion to include other companies within the scope of the ban if they determine, in consultation with the Director of National Intelligence or the Director of the FBI, that they are owned, controlled, or otherwise affiliated with a so-called "foreign concern" government.

Currently, "foreign countries of concern" include North Korea, China, Russia and Iran. Except for the three Chinese companies SMIC, Changxin Memory and Yangtze Memory, no other companies have been included in the scope of restrictions.

According to legal procedures, the FAR amendments are expected to take effect on December 23, 2027. The proposed rule has not yet been finalized and is open to public comment until April 20, 2026.