According to VR World and HPCwire, the U.S. government has blacklisted "high technology" shipments to the National Supercomputing Center Changsha (NSCC-CS), National Supercomputing Center Guangzhou (NSCC-GZ), National Supercomputing Center Tianjin (NSCC-TJ), and the National University of Defense Technology (NUDT) in China. This effectively means that these major supercomputing facilities can no longer purchase Intel Xeon chips. Tianhe-2, the world's fastest supercomputer since June 2013 according to Top500, is located at the NUDT in Guangzhou and uses a total of 32,000 Intel Xeon and 48,000 Xeon Phi chips.
The main claim of the Bureau of Industry and Security's End-User Review Committee (ERC) is that NUDT, which used US-manufactured parts to produce the Tianhe-1A and Tianhe-2 supercomputers located at the National Supercomputing Centers in Changsha, Guangzhou, and Tianjin, is believed to be engaged in activities related to nuclear explosives.
The U.S. also uses supercomputers for nuclear weapons research.
The news coincides with the Intel Developer Forum 2015 in Shenzhen, China, at which the company announced new Braswell, SoFIA, and Cherry Trail chips, among other products. VR World speculates that the move could cost Intel $1 billion on lost Broadwell-EP Xeon E5v4 sales and accelerate the development of homegrown Chinese processors.
Could be related to the territorial disputes in the south china sea. China knows that the US is hamstrung in the middle east (and China might be helping behind the scenes to destabilize things there to keep the US busy...) So they've been throwing their weight around in Asia pretty much unchecked.
The US might have erred too much in neutering Japan after WW2, although China's rise to power was pretty much inevitable... Probably wouldn't have mattered. If you look though, the west has invaded pretty much all of those territories at one time or another; Korea is still a mess which won't end any time soon.
Back to the processors, I agree its just an annoyance. Even so, It's not simple to switch processors when you've standardized a supercomputer on a particular architecture. And It does have to make them wonder how far we'll go if they push the west further, for them to build it in the first place I would bet that they never thought that we'd do something like this. The embargoes against Russia have succeeded pretty well in stalling their economy, so China has to be ever so slightly worried. Without markets for their goods it would be interesting to see what would happen to China...