UPDATED: Chinese Conditions on SK Hynix-Intel Deal Demands CFIUS Re-Review

This is an updated version of a previous post found here. Stipulation to “Help a Third Party Competitor” Enter the Market Requires New Investigation Thousands of words have been spilled by China Tech Threat and our allies demonstrating that semiconductor design and manufacture are among the U.S.’ most important strategic assets. The National Counterintelligence and Security Center recently reaffirmed this by identifying semiconductors as one of five “technologies that may determine whether America remains the world’s leading superpower or is eclipsed by strategic competitors in the next few years.” (See the NCSC fact sheet here.) Accordingly, no one was surprised when CFIUS reviewed the sale of Intel’s NAND memory and storage unit to South Korean-based SK Hynix. As you will… Read More

Chinese Conditions on SK Hynix-Intel Deal Demands CFIUS Re-Review

See updated version of this story here. Stipulation to “Help a Third Party Competitor” Enter the Market Requires New Investigation Thousands of words have been spilled by China Tech Threat and our allies demonstrating that semiconductor design and manufacture are among the U.S.’ most important strategic assets. The National Counterintelligence and Security Center recently reaffirmed this by identifying semiconductors as one of five “technologies that may determine whether America remains the world’s leading superpower or is eclipsed by strategic competitors in the next few years.” (See the NCSC fact sheet here.) Accordingly, no one was surprised when CFIUS reviewed the sale of Intel’s NAND memory and storage unit to South Korean-based SK Hynix. As you will recall, the purpose of… Read More

Is the Biden Administration Finally Going to Crack Down on China’s Chipmakers?

Bloomberg reports that the National Security Council (NSC) was set to meet yesterday to discuss tougher restrictions on China’s largest chipmaker, Semiconductor Manufacturing International Corp (SMIC). In September 2020, China Tech Threat described how China’s semiconductor sector is integrated with its military and noted the important report on SMIC by military intelligence expert James Mulvenon. However, SMIC’s designation as a military end user and ultimately to the Entity List seemed to lack teeth. Indeed as House Foreign Affairs Ranking Member Mike McCaul (R-TX) told China Tech Threat in a recent exclusive, the licensing policy for SMIC is “utterly ineffective” and “appears designed to give the company access to nearly all the semiconductor manufacturing equipment, technologies, and other goods it needs… Read More

White House: The US must be Relevant Against China in SMEs

At an event hosted by AT&T last week, key members of the Biden Administration offered an update on Capitol Hill and Administration activity to address ongoing semiconductor supply chain and ICT issues. Speakers included Sreenivas Ramaswamy, Senior Policy Advisor, Office of the Secretary at the Department of Commerce; Peter Harrell, Senior Director for International Economics and Competitiveness, White House National Security Council; and industry leaders such as: John Neuffer, President & CEO, Semiconductor Industry AssociationRobert Hoffman, Head of Government Affairs, BroadcomMichael Petricone, Senior Vice President, Government Affairs, Consumer Technology Association (CTA)Jayne Stancavage, Global Executive Director of Product & Digital Infrastructure Policy, Intel CorporationBruce Stokes, Non-Resident Transatlantic Fellow, The German Marshall Fund of the United States Sreenivas Ramaswamy took the bulk… Read More

Semiconductors: Experts Weigh How US-EU Can Beat China

China Tech Threat co-founder Dr. Roslyn Layton joined Horizon Advisory’s Emily de La Bruyère and the National Security Institute’s David Hanke for a discussion on How the U.S. and E.U. Can Win Against China hosted by the Octavian Report and moderated by its Editorial Director Sam Munson. The panel discussed a trans-Atlantic strategy to address China’s malicious practices, growing militarization, and capturing of global connectivity. Layton highlighted the need for the US to uphold the same standards it demands of the European Union (EU), citing the case in which the US requested Dutch semiconductor manufacturing equipment (SME)provider ASML not to supply sensitive chipmaking tools to the Chinese military fab SMIC, which the US subsequently put on the Entity List, which… Read More

Hudson Institute’s Arthur Herman on Decoupling from China

Last week China Tech Threat founder Roslyn Layton sat down with Hudson Institute’s Arthur Herman. They discussed his recently launched Hamilton Commission, the #FutureofBIS and the importance of the U.S decoupling from China and ensuring that companies such as YMTC cannot enter the U.S market. See full discussion below:… Read More

The Hill and White House Get Tighter on the CCP’s Abuses

Rep. Michael McCaul (R-TX) and Sen. Bill Hagerty (R-TN) on Monday urged Commerce Secretary Gina Raimondo to add Chinese chipmaker Yangtze Memory Technologies Company (YMTC) to the department’s Entity List, citing ties to the Chinese military. The lawmakers wrote in the letter that urgency is needed to make sure memory chip supply does not become a “point of leverage” for China over the U.S. China’s “irrational state subsidies and non-financial support” to firms such as YMTC pose a threat to U.S. and its allies because memory chips have applications in defense, aerospace, artificial intelligence, they note. Both men sit on committees that have jurisdiction over export controls; McCaul is the ranking member of the House Foreign Affairs Committee and Hagerty is the… Read More

Rep. Pfluger: We Are Exporting Our Innovation and Subsidizing China’s Ability to Make It

Last week the U.S. House Foreign Affairs Committee took up the Ensuring American Global Leadership and Engagement (EAGLE) Act, which seeks to boost U.S. competitiveness with China. During the markup (see video starting around 3 hr, 31 min) , Representative August Pfluger (R-TX11) introduced an amendment to add Yangtze Memory Technologies Company (YMTC) to the U.S. Entity List.   “[Semiconductors] are a vital component to every single device, computing product that we use,” Rep. Pfluger said. “The [People’s Republic of China] seeks self-sufficiency in semiconductor manufacturing so it can control the means of production, supply its growing demand for semiconductors both in military and also civilian use, and increase its leverage over trading partners.” In the U.S. Air Force, Rep.… Read More

Chinese Universities Join the Push for Semiconductor Dominance

China’s mainland universities are ramping up programs to support the Chinese government’s ambitions to dominate the global semiconductor market, the South China Morning Post reported this week. “The increase in… academic programmes shows how China is doubling down on efforts to build up its semiconductor industry, which has been hampered by Beijing’s tech and trade war with Washington,” the article notes. The Made in China 2025 plan calls for eight percent of Chinese R&D expenditures to be directed to the semiconductor market, but a lack of skilled engineers “continues to be a drag on China’s attempts to catch up with the West.” The universities’ engagement demonstrates the Chinese Communist Party’s whole-of-nation approach to developing the country’s indigenous chip-making capabilities. Through… Read More

White House Report Part 2 of 2: Short-Term Profits Undermine Long-Term Resilience

A White House report last week offers a solemn assessment of American companies prioritizing profits over national security and long-term sustainability. “A focus on maximizing short-term capital returns has led to the private sector’s underinvestment in long-term resilience,” the 250-page report states. The United States has a competitive advantage over China in the production of semiconductor manufacturing equipment (SME), which provides a chokepoint that can limit “advanced semiconductor capabilities in countries of concern.” Yet, despite tighter export controls in recent years, sales to Chinese companies have been a major driver of American SME makers’ profits. Approximately 90 percent of Applied Materials’ and Lam Research’s revenues came from non-U.S. sales last year, the White House report notes. The percentage of Lam… Read More