The Hill and White House Get Tighter on the CPP’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

Let the Chips Fall at BIS? Highlights Challenges, Opportunities for Biden Nominee

President Biden’s nominee to lead the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) will need to advance offensive and defensive measures to curtail China’s ambitions to dominate modern technology markets. That was among the participants’ recommendations during today’s virtual roundtable, “Let the Chips Fall at BIS?” The event, hosted by Dr. Roslyn Layton, featured Emily de La Bruyère, Senior Fellow at the Foundation for Defense of Democracies; Stephen Ezell, Vice President of Global Innovation Policy at the Information Technology & Innovation Foundation; and Will Hunt, Research Analysist at the Center for Security and Emerging Technology. The event coincided with the release of the White House’s 100-day supply chain review report. Among the findings, the report highlights the… Read More

SOS International Report Details Chinese State-Owned YMTC’s Military Ties

Last December, James Mulvenon of SOS International released a report that explored Chinese state-owned memory chip maker Yangtze Memory Technologies Company’s (YMTC) ties to the Chinese Communist Party (CCP) and People’s Liberation Army (PLA). The report identified alarming uses of state subsidies to support espionage and anticompetitive practices against competitors. The December report came weeks after Dr. Roslyn Layton cautioned in Forbes that, given ties to the PLA, YMTC and other Chinese state-owned chip makers “must be added to the Entity List [or at least designated as a Military End User] to ensure critical US technology is not weaponized against Americans.” In February, Dr. Mulvenon, who is rumored to be a front-runner to lead the U.S. Commerce Department’s Bureau of Industry and… Read More

Rep. McCaul, Sen. Cotton Call on U.S. Commerce to Department to Tighten Controls on SME

Congressman Michael McCaul, ranking member of the House Foreign Affairs Committee, and Senator Tom Cotton called on U.S. Commerce Secretary Gina Raimondo last week to tighten restriction on the sale of semiconductor manufacturing equipment (SME) to China. “The export of advanced dual-use U.S. technology to any People’s Republic of China entity is effectively a direct delivery to the People’s Liberation Army,” the letter states. “Our export control system should reflect this reality.” Rep. McCaul and Sen. Cotton cite a Washington Post article this month, which revealed that sensitive electronic design automation (EDA) equipment sold to an ostensibly civilian Chinese company is now being used by China’s military to develop advanced weapons. Among those is a hypersonic missile that may be… Read More

New Bipartisan Bill Will Give U.S. An Edge In Competition With China

The recent introduction of the Endless Frontiers Act represents a new, bipartisan tool for the U.S. to combat the intensifying pressure from China, especially when it comes to semiconductors. The bill calls for $100 billion over five years for basic and advanced technology research and $10 billion to create new technology hubs across the country. As a lead bill sponsor, Senate Majority Leaders said “whichever nation develops new technologies first – be they democratic or authoritarian – will set the terms for their use.” Schumer has been out front in recruiting semiconductor initiatives to New York.  A Reuters report on the bill quoted Representative Mike Gallagher who stated that “the Chinese Communist Party has used decades of intellectual property theft… Read More

Roslyn Layton Tells Voices of America The Importance of Securing the Semiconductor Industry in Both the Long and Short Term

During President Biden hosted a virtual meeting with leaders of some of the country’s biggest companies impacted by a global shortage of semiconductors, on April 12, he noted that the U.S must find a way to “strengthen our domestic semiconductor industry and secure the American supply chain.”  This meeting and the President’s urgency on this matter is commendable. However, in an article published by Voice of America White House Bureau Cheif Steve Herman, Roslyn Layton made it clear that the short-term issue of a shortage of semiconductors for the automotive industry should not be confused with the larger, existential problem that the United States does not produce enough of its own chips. Dr. Layton went on to say that there… Read More

Summarizing CSET on Security Without Collateral Damage

Saif M. Khan is a leading tech policy expert with a background in intellectual property law and an education in physics. A Research Fellow at Georgetown’s Center for Security and Emerging Technology (CSET), he studies AI policy, semiconductor supply chains, China’s semiconductor industry and U.S. trade policy. Khan has written many, highly detailed reports which reflect on the importance of export controls and the Bureau of Industry and Security (BIS). He recently told China Tech Threat: “It is important for policymakers to have a deep understanding of both the complexities of export control regulations as well as the relevant technologies and supply chains to ensure export controls are crafted in a targeted way to achieve their intended security goals while minimizing… Read More