In a move aimed at curbing China's access to advanced chips for artificial intelligence, the Biden administration has issued a warning to allies that it could implement drastic trade restrictions on foreign chipmakers. Japan's Tokyo Electron and Netherlands-based ASML are among the companies that could face these restrictions if they continue selling advanced chips to China, according to Bloomberg.

The increased efforts to block China's access to advanced chips come against the backdrop of heightened tensions between Washington and Beijing. The Biden administration is reportedly seeking to limit China's ability to power its artificial intelligence initiatives, which have raised concerns about national security and technology theft.

ASML, a major global player in chip manufacturing, has been specifically highlighted as one of the foreign firms that could be targeted by the new trade restrictions. This move demonstrates the seriousness of the Biden administration in its efforts to protect American technological interests.

This recent development follows a report from the Wall Street Journal in July, which revealed that a network of buyers and sellers was smuggling advanced Nvidia chips to China, despite the Biden administration's previous efforts to prevent such activities. These illicit dealings further underscore the administration's concerns about China's tech ambitions and the need for stricter controls on advanced chip exports.

Separately, former President Donald Trump drew attention to Taiwan's significant role in the chip industry. He expressed dissatisfaction with Taiwan's dominance in manufacturing advanced microchips, stating that "Taiwan took our chip business from us." Trump even suggested that Taiwan should compensate the United States for defense purposes. Taiwan currently accounts for a staggering 92% of global chip manufacturing and is a critical hub for supplying advanced microchips worldwide.

While recent geopolitical tensions have sparked concerns among investors about the tech industry, Wedbush analyst Dan Ives believes that these fears may be overblown. He characterizes the current situation as a "golden buying opportunity" for tech stocks. Ives highlighted how previous concerns about China and geopolitical issues did not hinder the steady rise of tech stocks over the years.

As the United States seeks to protect its national interests and maintain its technological edge, the warnings and potential trade restrictions on chipmakers supplying China underscore the importance of controlling the flow of advanced chips. This development will undoubtedly have implications for the global semiconductor industry and its future trajectory.

Disclaimer: This article is based on the information provided and may not cover all aspects of the situation.