SAN FRANCISCO, June 17, 2026, 05:46 (PDT)
- U.S. chip policy is moving on two tracks: tighter security aims, but slower blacklisting of some Chinese firms.
- Commerce signed a $500 million CHIPS R&D award with SandboxAQ to attack materials bottlenecks in chipmaking.
- Intel pushed 18A-P into risk production as smaller AI-chip challengers keep testing Nvidia’s hold on data-center hardware.
U.S. officials have held off adding China’s DeepSeek, memory chipmaker ChangXin Memory Technologies and more than 100 other firms to a trade blacklist despite their being flagged as security risks, two people familiar with the matter told Reuters. The delay puts a sharper edge on this week’s semiconductor news: Washington is trying to build more of the chip supply chain at home while keeping advanced technology away from China.
That matters now because the contest is no longer just about who makes the fastest graphics processor. It now runs through materials used inside fabs, export licenses, memory chips and the processors that run AI services after a model has already been trained.
The U.S. Commerce Department’s CHIPS Research & Development Office said it signed a definitive agreement with SandboxAQ for a $500 million award to develop AI-aided materials discovery for semiconductor manufacturing. The work targets PFAS “forever chemicals,” catalysts, rare earth-free magnets and backup-power battery chemistries, all less visible than a chip plant but still needed to keep production running. NIST
Intel, meanwhile, said its 18A-P process had entered risk production, an early manufacturing phase before full-scale output. The company said the process can deliver 9% higher performance at the same power level or cut power use by 18% at the same performance, a claim aimed at customers weighing Intel against foundry leader TSMC.
SandboxAQ is backed by Nvidia and was valued at $5.75 billion in April 2025, Reuters reported. CEO Jack Hidary said chip manufacturing offers chances to “choose different chemicals” and, where PFAS cannot be avoided, “break it down on site” before it leaves the fab. Reuters
Commerce will receive a minority, non-controlling equity stake in SandboxAQ, the department said. Reuters reported the government also stands to receive royalties if successful formulas are licensed to industrial partners, an unusual return mechanism for a chip-supply-chain award.
Intel Foundry chief Naga Chandrasekaran said the VLSI Symposium update showed Intel was “committed to leading edge process innovation,” while adding there was “more work ahead.” The phrasing was careful, and it had to be: 18A-P still has to prove yields, customer demand and economics, not just lab metrics. Newsroom
The export-control story cuts the other way. The Entity List, a Commerce Department roster that restricts shipments of U.S. goods, software and technology without a license, has not had new additions since October, Reuters reported. Philip Luck at the Center for Strategic and International Studies called the list “whack-a-mole”; former Commerce official Kevin Kurland said trade policy was overshadowing a national security tool. Reuters
Beijing pushed back. Chinese foreign ministry spokesperson Lin Jian said the U.S. should stop “politicizing, instrumentalizing, and weaponizing” economic and technology issues, Reuters reported. The same pressure is helping Chinese suppliers argue they can work around U.S. limits, including Huawei, whose semiconductor comeback and chip-stacking approach were profiled by the Financial Times on Wednesday. Financial Times
Competition is also widening below the top tier. Tensordyne said it expects more than $200 million in orders for a new AI inference system, using “inference” to mean the computing work of answering prompts after training is complete. CEO Marc Bolitho told Reuters the startup had “over a dozen” letters of intent and “over $200 million in forecasted demand”; its Napier chip is being made by TSMC and was developed with Broadcom and HPE-owned Juniper Networks. Reuters
But the week’s news does not settle much. SandboxAQ still has to turn models into factory-grade materials, Intel must show repeatable yields, and U.S. export policy could leave gaps if blacklists and replacement AI-chip rules keep lagging events.
U.S. cash equities had not opened at the San Francisco dateline time. The first market read will come later Wednesday, but the policy signal is already clear enough: chips remain the place where industrial policy, China risk and AI spending collide.
