A picture of a microchip with a Chinese national flag on it.
Photo: Steven McDowell/Science Photo Library/Getty Images

Biden’s bet: No software? No chips.

Protocol Enterprise

Hello and welcome to Protocol Enterprise! Today: why the U.S. Commerce Department took action against exports of a critical type of software to China, Thoma Bravo goes shopping again and the latest fundraising activity in enterprise tech.

Design flaws

The U.S. Commerce Department has implemented an export control on advanced chip design software that’s necessary to produce next-generation processors, expanding on existing controls that target chipmaking tools with the goal of hampering Chinese efforts to build the most-complex chips domestically.

The new export restrictions target electronic design automation, or EDA, software produced by the likes of Cadence and Synopsys.

  • The goal is to hamper Chinese companies pursuing AI applications and prevent them from building chips with an emerging technology called gate all around, according to a person familiar with the Biden Administration’s plans.
  • The advanced design tools are necessary to make chips with gate-all-around designs that are capable of delivering substantially more computing horsepower with far less energy than today's chips.

The Commerce Department issued the new rule Friday, though Protocol first reported on the pending plan to block advanced EDA software exports earlier this month.

  • China’s effort to manufacture the most-advanced chips has roughly stalled at the 14-nanometer level, a process that the likes of TSMC, Samsung and Intel perfected about eight years ago.
  • In recent weeks, a report emerged that China had successfully made a 7-nanometer chip, though experts in some corners of the industry were skeptical of the claims.
  • Nanometer naming conventions can be misleading, however. At one point they referred to the size of a specific feature on a chip but today mostly amount to marketing terminology.

In addition to blocking advanced design software, officials said the U.S. would restrict gallium oxide and diamond, materials that are used to make chips work under extreme temperature or energy conditions that are often useful for the military.

  • The Commerce Department said it is implementing the chip-related restrictions that were agreed upon in December by the 42 countries that participate in the Wassenaar Arrangement, an international arms control agreement.

— Max A. Cherney (email | twitter)

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Financial corner

CleverTap raised $105 million for its employee engagement and retention software.

Geek+ raised $100 million to build software for warehouse robotics.

— Aisha Counts (email | twitter)

Around the enterprise

Thoma Bravo is reportedly looking to add another enterprise tech company to its massive portfolio, kicking off talks with cybersecurity company Darktrace according to Reuters.

Signal users were urged to activate the “registration lock” feature on the secure communications app to deter problems stemming from the Twilio hack.

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