As U.S. chip and technology companies continue to grapple with the U.S’s latest export restrictions on China (see 2211010042), a number of firms fear the controls will hurt their sales and exacerbate uncertainty in the semiconductor sector and the industry’s supply chains. In filings with the Securities & Exchange Commission this month, at least one firm projected revenue losses while others said they are still assessing the impact of the complex controls and whether they can secure export licenses.
The top Republican on the House Foreign Affairs Committee is asking the Commerce Department to provide its licensing data and communications with chip companies, along with a broad swathe of related information, to make sure the agency is implementing its new China controls “fairly across all market players.”
The Bureau of Industry and Security will likely add more entities involved in China’s supercomputing and semiconductor manufacturing industry to the Entity List, said Thea Kendler, BIS’s assistant secretary for export administration. “We view advanced chip manufacturing and supercomputer activities in China as a national security concern,” Kendler said during a Nov. 2 Information Systems Technical Advisory Committee meeting. “So I expect that there will be Entity List additions.”
A Republican-backed bill introduced in the House could lead to the transfer of export control authorities from the Commerce Department to the Defense Department. The bill, introduced Oct. 28 by Reps. Jim Banks, R-Ind., Rob Wittman, R-Va., and Greg Steube, R-Fla., includes language critical of the Bureau of Industry and Security, saying the agency has made “little progress” in controlling emerging and foundational technologies under the Export Control Reform Act and that BIS’s export control authorities should be revoked.
The Bureau of Industry and Security recently sent a proposed charging letter to Seagate Technology alleging that it violated U.S. export controls by providing controlled items to a company on the Entity List. Seagate said the Aug. 29 letter accused it of violating the Export Administration Regulations by providing hard disk drives to the blacklisted company and its affiliates between August 2020 and September 2021.
Although the new U.S. export controls against China are likely to have minimal impacts on the U.S. semiconductor industry, a broader implementation of the controls could quickly raise costs on U.S. and allied suppliers and hurt the domestic chip industry, the Rhodium Group said in a report this month. The research firm said damages to semiconductor companies “could balloon quickly under a tightening of controls,” which it believes is “highly plausible.”
In coordination with DOJ and the FBI, the Office of Foreign Assets Control has added one individual and two organizations to its Specially Designated Nationals list, according to an Oct. 19 notice.
The Biden administration should cripple Huawei’s plans to build a semiconductor foundry in Shenzhen through additional export controls, five Republican senators said in a recent letter to the White House. They said Huawei is using Pengxinwei (PXW) IC Manufacturing -- a startup launched by a former Huawei executive, Bloomberg reported -- to build a new chip foundry in a bid to evade U.S. trade restrictions. The letter was signed by Marsha Blackburn and Bill Hagerty, both of Tennessee, Tom Cotton of Arkansas, Ted Cruz of Texas and Marco Rubio of Florida.
Export Compliance Daily is providing readers with the top stories from last week in case you missed them. You can find any article by searching the title or by clicking on the hyperlinked reference number.
Apple has suspended plans to use memory chips from China’s Yangtze Memory Technologies Co. in its products, Nikkei Asia reported Oct. 17. The report comes days after YMTC was added to the Commerce Department’s Unverified List (see 2210070006) and after the agency announced a sweeping set of China-related export controls (see 2210070049). If Commerce can’t complete an end check of YMTC within 60 days after its addition to the UVL, the Chinese company may be moved to the more restrictive Entity List.