Walled off chip.
Illustration: Christopher T. Fong/Protocol

The US chokes China's chips

Source Code

Good morning! The Biden administration is cutting China off from the tools it needs to build advanced chips. But China isn’t the only one that’ll feel the effects.

Chipping away at China’s chipmaking

The U.S. has spent months blocking exports of vital tools for advanced chipmaking to China. The idea: to choke off China's chipmaking capabilities.

The goal of a new measure is to cut Chinese access to tools, software and support mechanisms needed to build specific transistors, two people familiar with the administration’s plans told Protocol’s Max Cherney.

  • The administration plans to block U.S. exports of tools that print chips that involve a specific transistor type known as FinFET. It will also restrict companies that make these tools — including Applied Materials, Lam Research and KLA — from servicing equipment they’ve already sold to Chinese chipmakers.
  • The technology is one of the fundamental building blocks of modern microchips, and is widely used to manufacture chips for servers, iPhones and more.

This is part of a bigger initiative: The U.S. Commerce Department already placed an export control rule on advanced chip design software needed to produce next-generation processors.

  • The U.S. sees China’s chipmaking as a threat, Max told me, and Trump-era policies weren’t doing enough.
  • Instead of just halting further progress in China, the administration is trying to “roll back its current capability,” Max said.

China isn't impressed by current U.S. semiconductor policy. Yu Xiekang, vice chair of the China Semiconductor Industry Association, has called the $52-billion U.S. Chips Act "discriminatory," Bloomberg reported.

U.S. tool companies will feel the impact of the new restrictions. China makes up around 30% of their revenue, a chunk of which is from service and support, as the tools used to build these chips become more complex.

  • At least two companies — KLA and Lam Research — have already received notifications from the government about tool export restrictions.
  • Shipments of machines will need to be redirected, but finding demand for the supply won’t be too difficult in the current climate. “Ironically, we don’t have enough chips to make the machines to make the chips we don’t have enough of,” Max said.

— Nat Rubio-Licht

Tweeps are flying the coop

People are leaving Twitter in droves. At least seven people called Aug. 12 their last day working at the company, and we’ve counted roughly 50 more who’ve left between April (the time Musk announced his intention to buy Twitter) and now.

Twitter's head count dropped 5% over the past six months, according to Twitter’s LinkedIn profile. The company said in an SEC filing last month that attrition is “slightly higher than best practice for normal macroeconomic times.” But many are leaving in part because of Elon Musk, Business Insider reported.

  • According to Insider, at least one employee a week announces their departure on Slack or publicly on Twitter.
  • Some people who recently left told Insider that many are leaving because they’re frustrated with Musk’s deal and the way leadership handled it.
  • “The uncertainty is making people really anxious,” one former employee told me. “It’s unsatisfying to know that a whole company strategy could be blown up in a few months, and what you're working on may or may not need to exist after that.”
  • “So many people have left, they won’t even need to do more layoffs,” another former worker told Insider.

But don’t hold your breath for a Twitter mafia.” At least, not yet. According to our LinkedIn analysis, the people who are leaving aren't all going to the same place.

  • A handful of employees left for jobs at Meta, Google, Spotify, Snap, Uber and Stripe. Others left to take up freelance work or attend grad school. About a dozen others only indicated on LinkedIn that they no longer work at Twitter but didn’t list a new company.
  • It’s hard for all Twitter employees to go to the same place, the first former employee told me, because like many companies, departing workers must sign a “no poaching” agreement. Still, he said he’s heard from at least a dozen of his former colleagues asking if there are any job openings at his current company.

— Sarah Roach

Sponsored content from Cisco

How cybercrime is going small time: Cybercrime is often thought of on a relatively large scale. Massive breaches lead to painful financial losses, bankrupting companies and causing untold embarrassment, splashed across the front pages of news websites worldwide.

Read more from Cisco

People are talking

Binance's Yi He feels like she's been in crypto for a long time:

  • "I’m one of the most OG in the Binance group."

Making moves

Dan Price stepped down as Gravity Payments' CEO. Price, who's facing misdemeanor charges related to assault accusations, said his presence at the company has "become a distraction" and he needs to focus on "fighting false accusations made against me."

Chin Tah Ang is Crypto.com's new GM of Singapore. Ang previously led Digital Industry Singapore. (edited)

Chris Fortier is Yuga Labs’ new VP of product. Fortier worked on Music for Twitch and oversaw Rally.io’s social token and NFT work.

Emily Nerland is NS1’s new head of global sales. Nerland previously worked at Masergy as managing director for EMEA.

Derar Islim is replacing Michael Moro as Genesis Trading’s chief. The crypto broker is also cutting staff by 20%.

David Searle, head of legal at Tesla, has left the company, according to Bloomberg. Dinna Eskin, a deputy general counsel at the company, has taken over his role.

SAP, Indeed and Mercari executives joined TechNet. The trade association has 100 members.

In other news

Voice deepfake attacks against businesses are rising.They’re often aimed at tricking corporate employees into giving up money, and in some cases they’re succeeding.

Amazon's reportedly looking for a movie exec to help lead Amazon Studios. The company's been in talks with producers like Paramount Pictures's Emma Watts and Netflix's Scott Stuber about the role, according to the Wall Street Journal.

If you’ve applied for a U.S. visa, there’s a chance your online habits have been scrutinized by an immigration official. But one activist group says that this Trump-era policy, continued and defended by Biden, might be illegal.

TikTok creators are taking aim at Amazon: Around 70 of them, with a combined following of 51 million, are boycotting working the company until it complies with a list of demands, including paying warehouse employees more and putting an end to union-busting.

Meanwhile, Amazon may be coming for TikTok. The company’s testing a feature, internally referred to as “Inspire,” that shows users a TikTok-style feed of products on its apps.

Apple is in talks to make Watches and MacBooks in Vietnam, the first time the devices would be made outside of China.

Passing the torch

For Alto Pharmacy co-founder Jamie Karraker, stepping down as CEO wasn’t a hard decision to make. “It's so obvious to us that if we want to keep getting better, and keep staying ahead of the rest of the pack, it's important to look ahead and hire for the next few years versus for right now,” he told Protocol. Learn how Karraker made the decision to step back and let Alicia Boler Davis, a member of Amazon’s S-Team, take the helm.

Sponsored content from Cisco

How cybercrime is going small time: People have been swindled since before man created monetary systems. These aren’t new crimes; just new ways to commit them. But as cybercrime increasingly goes small-time, those on the front lines will need new and more effective ways to fight it.

Read more from Cisco

Thoughts, questions, tips? Send them to sourcecode@protocol.com, or our tips line, tips@protocol.com. Enjoy your day, see you tomorrow.

Recent Issues

The best of Protocol

The confessions of SBF

Your holiday book list

A tale of two FTXs