Washington: The administration of President Joe Biden has taken another step in its effort to block China from obtaining cutting-edge semiconductor technology by imposing new sanctions to block US government funding from helping the Chinese chip manufacturing sector.

New rules were introduced Tuesday by the US Commerce Department, which it claims will help ensure that the government's $52 billion semiconductor fund bolsters the security of Washington and its allies.

The so-called "railing" is meant to prevent hostile nations from using government incentives for the chip industry for "malicious purposes against the United States or its allies and partners."

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China and Russia were mainly mentioned as "opponent countries" in this context. The new limits would prevent recipients of government funding from investing in chip plants in "foreign countries of concern" or using the funds overseas.

In addition, recipients of the funds would not be permitted to collaborate on research projects or license technologies to businesses in those nations. According to reports, the Biden administration intends to implement new export controls to further limit China's access to US chip technology.

In October last year, Washington imposed sweeping export controls that prevented Chinese companies from buying specific semiconductor manufacturing equipment or chips produced anywhere in the world using American equipment.

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Robert O'Brien, a former national security adviser, said last week that Washington would destroy Taiwan's semiconductor factories, if necessary, to prevent them from falling into Chinese hands.

That's because Washington is so eager to block Beijing from making technological advances in chip manufacturing. Taiwan's TSMC is the leading producer of modern computer chips, producing about 90% of the world's supply of state-of-the-art semiconductors.

The administration views American semiconductor technology as essential to national security, but the Commerce Department proposed even tighter limits.

This includes chips used for quantum computing, specialized military applications, and settings with high radiation levels. Artificial Intelligence Semiconductors was previously subject to tough sanctions from Washington.

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Beijing complained to the World Trade Organization last December about the US export restrictions, claiming Washington was using its regulatory authority to block high-tech components from China and hinder normal trade.

Representatives of the Chinese government have also issued warnings that the sanctions would hurt the world economy and disrupt supply chains.