Deck the Halls with China Tech Threat’s Holiday Reading List

Coonen: Defense Spending Increases Will Be Irrelevant If We Don’t Curtail China Acquisition Of U.S. Technology. Following his praise of Congress for increasing defense spending and military capabilities in the Indo-Pacific in the National Defense Authorization Act (NDAA), former Defense Technology Security Administration Senior Advisor and CTT Special Advisor Steve Coonen warns that increased spending could be irrelevant without complimentary export control policies to curtail China’s ability to use U.S. technology against us. Citing Russia’s use of Chinese-made DJI drones that contain American cutting-edge technology, Coonen warns: “Far from dissuading diversion, U.S. export control policies are an open invitation for the Chinese Communist Party to send U.S. technology to whichever end user they desire. In this case, U.S. loopholes are… Read More

The U.S. Has Work to Do at Home to Stop the PLA’s Modernization

By Steve CoonenIn a sign that it still knows how to do at least one thing right, Congress has lately been busy preparing the U.S. military to fight and win against the People’s Liberation Army (PLA). In December, the annual National Defense Authorization Act (NDAA) passed the House of Representatives with increases in defense spending and military capabilities in the Indo-Pacific. These desperately needed steps will help America’s warfighters (and those of our partners and allies) deter Chinese military aggression. But these actions will ultimately be irrelevant if the Biden Administration and Congress do not similarly curtail China’s ability to use U.S. technology to modernize the People’s Liberation Army. Both branches of government would be wise to implement recent… Read More

Kudos, Secretary Raimondo: First Chips Act Grant Supports U.S. Legacy Chip Production  

Give credit where it’s due: The Commerce Department has made a notable decision in using the first CHIPS Act grant to support U.S. legacy chip production.  On December 11, the Commerce Department announced that a U.S. subsidiary of BAE Systems would receive $35 million “to support the modernization of the company’s Microelectronics Center, a mature-node production facility in Nashua, New Hampshire.”  The release continued: “The project will replace aging tools and quadruple the production of chips necessary for critical defense programs including the F-35 fighter jet program.”  Here are three reasons why this announcement is important:  It signals to the rest of the U.S. government and the semiconductor supply ecosystem that a trusted supply of all… Read More

Raimondo Talks Tough at Reagan Defense Forum But Challenges Remain  

Last weekend Secretary of Commerce Gina Raimondo spoke at the annual Reagan National Defense Forum, one of the signature events on the national security calendar. As the name might suggest, the gathering is traditionally popular with right-leaning national security figures, so credit a Democratic Secretary of Commerce for making an appearance. While she did have comments worth applauding, it’s clear the administration is still focused on advanced chips and needs to broaden its focus to counter threats at the legacy chip level for the sake of our national security and economic prosperity.  CTT has long argued that U.S. semiconductor equipment companies are putting cash over country (see our report by that name) by selling some of the world’s most sensitive… Read More

USCC Report Underscores Risks from China’s Legacy Chip Sector

Each year the U.S.-China Economic and Security Review Commission issues its annual report to Congress. This year’s offering grasps that legacy chips should be considered as part of the U.S.-China national and economic security equation. Earlier this year, CTT’s Every Chip Matters report articulated how China is subsidizing state champion chipmakers like SMIC in order to eventually control the global legacy chip market. Similarly, the bipartisan USCC’s commissioners write in their report, “[China] is evidently betting that massive, state-directed investments and continued access to foreign technology can help it to achieve the breakthroughs it needs to boost productivity and maintain growth.”  The Chinese government’s subsidies and reliance on Western tech appears to already be bearing fruit. The appearance of a… Read More

CTT Weighs In on Bipartisan AI Bill 

Earlier this month, Sens. John Thune (R-SD) and Amy Klobuchar (D-MN) led a group of bipartisan Senators in introducing the Artificial Intelligence (AI) Research, Innovation, and Accountability Act of 2023. The legislation is designed to establish a framework to bolster innovation while bringing greater transparency, accountability, and security to the development and operation of the highest-impact applications of AI.CTT Co-Founder Roslyn Layton welcomed the bipartisan bill with a statement that was shared by Sen. Thune.She said: “China Tech Threat applauds the important bipartisan work of the Senate Committee on Commerce, Science, and Transportation to examine critical policy issues of AI. We support the Committee’s continued engagement with stakeholders to craft policy which supports AI research and innovation. As… Read More

Caught Red Handed: Applied Materials Allegedly Illegally Exporting Tech to China

For years China Tech Threat has warned that U.S. export controls have been insufficient to stop the transfer of American technology to the Chinese military. In our August 2023 report, Cash Over County, we explained how American semiconductor equipment manufacturers Applied Materials, KLA, and Lam Research grew their combined revenues from China by 103% between 2018 and 2022—strengthening the Chinese military and intelligence apparatuses in the process.Apparently, the greed infecting at least one of these companies is worse than we thought.Reuters reports that the Justice Department is investigating Applied Materials for allegedly selling hundreds of millions of dollars’ worth of equipment to China in violation of U.S. export controls. The alleged infractions took place in 2021 and 2022,… Read More

As Biden and Xi Meet, Chinese Tech Threats Continue to Grow

President Biden and Chinese President Xi Jinping will meet in San Francisco today. In the lead-up to the meeting, Treasury Secretary Janet Yellen said that the U.S. seeks “a pragmatic economic strategy: one that protects our vital national security interests while seeking a stable and healthy economic relationship.”It sounds wonderful. But the most pragmatic strategy is one that recognizes the extent to which China is threatening the U.S. through technology. If left unchecked, multiple ongoing Chinese efforts in the tech arena will continue to damage both American national security and prosperity.Begin with semiconductors. China has responded to the U.S. restrictions imposed on advanced chips (14nm and lower in node size) in October 2022 by subsidizing the production of… Read More

YMTC’s Chip Breakthrough Shows Weakness of U.S. Export Controls

Last year, the U.S. imposed export controls designed to curtail the flow of American chipmaking technology to Chinese semiconductor firms. Soon after, one of China’s top chipmakers, YMTC, was added to the Entity List. Both actions were long awaited, but were they too little, too late? The evidence is mounting and suggests the federal government has much work ahead of it to properly curtail the Chinese semiconductor industry while also bolstering American production.The latest example comes from TechInsights, which recently reported that it discovered “the world’s most advanced 3D NAND memory chip in a consumer device.” Shockingly, its manufacturer is YMTC—a company with proven ties to the Chinese military. The fact that YMTC can continue to make world-leading chips… Read More

New Report Warns of Chinese Control of Legacy Chips

The Silverado Policy Accelerator is out with an excellent new report on how the Chinese government is using subsidies to grow China’s semiconductor industry, put Western firms out of business, and make the world dependent on Chinese legacy (or “foundational”) chips.Foundational Fabs: China’s Use of Non-Market Policies to Expand Its Role in the Semiconductor Supply Chain hits on many of the same notes which China Tech Threat’s Every Chip Matters did earlier this year. As Foundational Fabs’ executive summary states:The Chinese industry is already impacting the global industry by putting downward pressure on prices for some products and capturing market share. This is critical as foundational semiconductors account for three-quarters of global foundry capacity, are essential to applications… Read More