Investing.com — Jefferies analysts noted a report from Reuters that said President Biden could impose new restrictions on AI chip production for China before his term ends in January 20.

The restrictions are expected to have two main components: banning some countries that help China develop AI from accessing AI chips and preventing foundries such as TSMC and Samsung (KS:) from to make AI chips for Chinese companies.

Jefferies highlighted the high probability of these bans targeting TSMC and Samsung, saying “Preventing TSMC and Samsung from producing AI chips for China is highly likely to happen.”

Analysts stressed that TSMC has already suspended production of 7nm chips for Chinese clients pending further regulatory details.

The expected restrictions will include a detailed definition of “advanced AI chips” based on factors such as process node, die size, and the use of CoWos and HBM specs.

Jefferies points out that these measures aim to tighten existing loopholes and ensure compliance.

The restrictions are particularly expected to affect Chinese companies that design GPUs, ASICs, and ADAS chips, such as Alibaba (NYSE: ), Baidu (NASDAQ: ), and Horizon Robotics.

Jefferies says this policy may face implementation challenges, especially with regard to the involvement of third-party countries.

They argued, “This risks damaging US relations with these countries, and some of them are ‘dangerous’ friends of the US.”

Additionally, the company said the policy could undermine international relations because it could be perceived as coercive.

Despite the potential difficulties, Jefferies believes the Biden administration is committed to tightening regulations on AI chip production, which is unlikely to be reversed by a potential Trump administration.