New advanced computing and chip export controls against China (see 2210070049) represent an “unprecedented degree” of U.S. intervention to preserve technology leadership and could deal a major blow to China’s semiconductor industry, the Center for Strategic and International Studies said in a report last week. But there are several “lingering gaps” in the new policy that the Bureau of Industry and Security should “swiftly” address if it hopes to make the rules as effective as possible, the report said, including adding more companies to the Entity List, making sure the restrictions are adopted by allies and ensuring the agency is properly staffed.
Exports to China
The State Department announced penalties on one person and three entities and their subsidiaries for illegal transfers under the Iran, North Korea and Syria Nonproliferation Act. The agency in a notice said the parties transferred items subject to multilateral control lists that contribute to weapons proliferation or missile production. The State Department barred them from making certain purchases of items controlled on the U.S. Munitions List and by the Arms Export Control Act and will suspend any current export licenses used by the entities. The agency also will bar them from receiving new export licenses for any goods subject to the Export Administration Regulations. The restrictions will remain in place for two years from the Oct. 3 effective date.
The top Republican on the Senate Banking Committee, Sen. Pat Toomey, R-Pa., said the administration has "a strong case for what they're doing" in restricting U.S. technology that aids the Chinese semiconductor industry (see 2210070049), but he questions how effective it will be unless the Netherlands and Japan go along.
The Bureau of Industry and Security is "undertaking a vigorous outreach effort" to educate companies on the broad China-related export controls announced last week (see 2210070049) and plans to issue guidance soon, a Commerce Department spokesperson said Oct. 12. That guidance will likely take the form of frequently asked questions, the spokesperson said. The agency is also hoping its Oct. 13 public briefing helps answer some industry questions.
China this week criticized the U.S. decision to increase export controls on technology destined to the country (see 2210070049) and add more Chinese entities to the Unverified List (see 2210070006), calling the moves “a typical practice of technological bullying.” China’s Ministry of Commerce said “it not only violates the spirit of cooperation between the two sides and ignores the facts of cooperation between the two sides, but also seriously hinders the normal economic and trade exchanges between Chinese and American enterprises,” according to an unofficial translation of a statement.
The Bureau of Industry and Security's new sweeping set of export controls (see 2210070049) will “likely damage” the Chinese semiconductor and advanced computing industries and the U.S. and foreign companies that sell to those sectors, ArentFox said in an Oct. 10 alert. “While that was clearly the point of the new rule, we are expecting total chaos for a while,” the law firm said, adding that there is a “lot to unpack” in the 139-page rule.
The Bureau of Industry and Security added 31 Chinese entities to its Unverified List last week, including Yangtze Memory Technologies Co., a semiconductor firm that U.S. lawmakers for months have urged BIS to add to the more restrictive Entity List. The final rule, which took effect Oct. 7, also removed nine other entities from the UVL and included new guidance on what types of criteria and activities may lead to the transfer of UVL entries to the Entity List.
The Bureau of Industry and Security last week announced a broad set of new export controls it said will restrict China’s ability to acquire advanced computing chips and manufacture advanced semiconductors. The controls, outlined in an interim final rule that will take effect in phases, will impose new restrictions on a range of advanced computing semiconductor chips and semiconductor manufacturing items, impose controls on transactions for supercomputer end-uses and certain integrated circuit end-uses, and introduce new restrictions on transactions involving certain entities on the Entity List.
The Bureau of Industry and Security should add China’s Yangtze Memory Technologies Co. to the Entity List, China Tech Threat, an organization that advocates for stronger export controls on China, said in an Oct. 4 letter to BIS. The letter points to a potential partnership between Apple and YMTC (see 2209220022), which would “put U.S. and other foreign manufacturers out of business” and will allow China’s Ministry of Industry and Information Technology to move closer to “achieving its objective of forcing companies to turn to China as their prime source for advanced technologies.”
The Bureau of Industry and Security announced a sweeping set of new export controls it said will restrict China’s ability to acquire advanced computing chips and manufacture advanced semiconductors. The controls, outlined in a final rule that will take effect in phases, will impose new restrictions on certain advanced computing semiconductor chips and semiconductor manufacturing items, impose controls on transactions for supercomputer end-uses and certain integrated circuit end-uses, and issue new restrictions on transactions involving certain entities on the Entity List.