The US government has denied Intel's request to help China update the world's biggest supercomputer.
Intel applied for a license to export tens of thousands of chips to update the Tianhe-2 computer. The Department of Commerce refused however, saying it was concerned about nuclear research being completed with the machine.
Intel separately signed a $200m (£136m) deal with the US government to build a massive supercomputer at one of its national laboratories.
The Tiane-2 uses 80,000 Intel Xeon chips to generate a computational capacity of more than 33 petaflops; one petaflop is equal to about one quadrillion calculations per second.
According to an organisation known as the Top 500, which monitors supercomputers, the Tiane-2 has been the world's most powerful machine for the past 18 months.
This year the Chinese machine was due to undergo a series of upgrades to boost its number-crunching abilities past 10 petaflops.
The upgrades would depend on the new Intel Xeon chips, and the chipmaker informed US authorities of its involvement with the upgrade programme, who was then told to apply for an export license.
The US Department of Commerce said it refused Intel's application to export the chips for Tianhe-2 and three other Chinese supercomputers because, in their opinion, the machines were being used for "nuclear explosive activities".
The relevant section of the US export regulations reveals that this covers technologies used in the "design, development or fabrication" of nuclear weapons.
In a statement, the chip maker said: "Intel complied with the notification and applied for the licence, which was denied. We are in compliance with the US law."
It is now believed that China is accelerating its own home- grown chipmaking efforts to boost the power of the four supercomputers and complete the upgrade programme.
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