US expands curbs on China’s AI memory and chip tools, raising supply chain concerns

“Tech firms, especially those involved in AI training and inference, may experience delays and higher costs in acquiring these essential components,” Rawat said. “Similarly, server and PC chip shortages are exacerbated by restrictions on chipmaking tools, making it harder for Chinese manufacturers to produce advanced chips for servers and high-performance systems, potentially leading to delays or reliance on less advanced nodes.”

The resulting supply constraints could drive up chip prices, squeezing profit margins for enterprise technology companies or increasing costs for customers, ultimately impacting competitiveness in the market.

To navigate these challenges, firms may be forced to diversify their supply chains, identify alternative suppliers, and adapt procurement strategies. However, finding replacements for advanced semiconductors may be costly and difficult, further raising operational expenses.