The U.S. Commerce Department is rolling out a new set of export restrictions designed to prevent China from obtaining advanced chips.

The rules were announced today by the department’s Bureau of Industry and Security.

The export restrictions focus on chip foundries, or companies that make semiconductors for other organizations. Bloomberg reported that Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. are among the companies affected.

The rules also apply to chip packaging providers. Chip packaging is the technology used to assemble multiple silicon dies into a single processor. Some types of packaging link dies at the edges, while others make it possible to stack them atop one another in a three-dimensional configuration. TSMC manufactures both types alongside the processors that form its core focus.

Under the new export rules, foundries and packaging providers will have to obtain a license before they can export “certain advanced chips” to locations such as China. Officials will waive this requirement if a chipmaker obtains certain technical attestations from trusted players in its supply chain.

Foundries generate a sizable portion of their revenue from companies that design processors but don’t manufacture them. Such companies can receive an “Approved” or “Authorized” designation by the Commerce Department. If a foundry exports a processor to an Approved or Authorized chip designer and the latter firm verifies the processor falls below certain performance thresholds, the newly announced license requirements are waived.

The same applies to processors packaged by certain trusted OSAT, or outsourced assembly and testing, providers and front-end fabricators. Front-end fabrication is the process of etching transistors into a blank wafer. If a chipmaker partners with a company that meets those criteria to package a processor and the company verifies the processor’s transistor count doesn’t exceed a certain threshold, the new export restrictions don’t apply.

The Commerce Department also announced a number of other regulatory changes today. It’s rolling out a new process for adding companies to its list of approved chip designers and OSAT providers. Additionally, officials will improve disclosure procedures for situations when a chipmaker onboards a customer who may divert the processors it orders to China.

In conjunction with the release of the new rules, Commerce is adding 16 organizations to its Entity List. Those organizations include multiple AI companies that are supporting the development of advanced chip production capabilities in China.

One of the companies added to the Entity List is Sophgo Technologies Ltd. Last year, Sophgo was found to have transferred an AI processor it had ordered from TSMC to Huawei Technologies Co.. TSMC subsequently halted shipments to the company.

The Commerce Department is rolling out the rules days after the Biden administration introduced a collection of new AI chip export restrictions. Those restrictions focus on large graphics card orders. They also extend to the weights, or configuration settings, of proprietary AI models.

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