IN THE NEWS AND EVENTS
Export Compliance Daily
“The researchers said companies such as Lam Research, KLA and Applied Materials have “enjoyed record revenue and profits” from shipping to China, adding that many semiconductor companies have “actively found ways around the export controls.” Although the companies are seeing skyrocketing revenues, they also are helping to strengthen a formidable U.S. adversary and may eventually see their intellectual property stolen by their Chinese customers, the report said. “In this pursuit of short-term sales and profit,” it said, “the aforementioned American SME makers are naive.” Read more
“Even Samsung is a generation behind TSMC, which is now producing 5nm chips for Apple’s smartphones, says Layton. In a sign of American anxiety about silicon security, Intel this week announced plans for a $20 billion investment in its own foundries. Right now, Layton reckons it is two generations behind TSMC.” Read more
CPA’s Annual Conference – Research Presentation
Roslyn Layton provided and overview of the paper at the conference and answers questions with co-author, Jeff Ferry. Starting at 36:27, watch more.
CPA’s Annual Conference – Tech and Solar Panel
Roslyn Layton also talked about the paper during a panel discussion at the conference. Watch more.
“If the U.S. continues to relinquish its market share in the semiconductor industry, America’s economy, national security, and hardworking men and women in the manufacturing industry will all pay a steep price,” said China Tech Threat Co-Founder Dr. Roslyn Layton. “Policymakers know what needs to be done to regain our competitive edge, but they need to prioritize and commit to these actions. By strengthening enforcement of export controls, doubling down on chip manufacturing here in the U.S. and focusing on strategic coordination with international partners, the U.S. can restore its leadership and reap the benefits for the long-term.”
– Roslyn Layton, PhD, Co-Founder of China Tech Threat
• China is targeting global leadership in the semiconductor industry and has put some $120 billion of Chinese government money behind this campaign. Chinese domination of the vital semiconductor industry, if achieved, would make the U.S. dependent upon China for these vital components and endanger Americans’ security where chips are used for sensitive products and installations.
• Taiwan is a particular exposure for the U.S. One company, TSMC, accounts for over half of global chip foundry revenue, including chips used in almost every 4G and 5G smartphone. China’s long-term policy options include undermining or gaining control over TSMC’s business through a variety of means, ranging from competition to outright military conquest of the island of Taiwan. More largely, China’s aggression in the region threatens suppliers from nearby countries which produce a large and growing share of the semiconductors, which are used in items ranging from smartphones to automobiles to military vehicles.
• The U.S. must respond by strengthening its enforcement of the 2018 Export Control and Reform Act. U.S. semiconductor equipment makers and electronic design automation tool companies must be prevented from selling to entities with Chinese military ties. Today, that enforcement is too weak, and the list of restricted companies does not capture the breadth of the relevant entities. For example, firms like Applied Materials, KLA, and Lam Research sell to Yangtze Memory Technologies (YMTC) and ChangXin Memory Technologies (CXMT), companies which should be designated as Military End Users, if not Entity List actors, for their ties to the Chinese military.
• Building on its leadership in chip design, the U.S. must implement reforms to support a substantial increase in U.S. chip manufacturing, with a goal of producing 50% of semiconductors in every major category. This will strengthen U.S. national security and diversify supply and resiliency. Moreover, it will create hundreds of thousands of high-paying manufacturing jobs in the U.S.
• U.S. policymakers should focus on greater international coordination on strategic trade control to ensure that semiconductor inputs and equipment are not sold to Chinese military end users or uses. U.S., European, and Japanese suppliers produce 90% of the world’s semiconductor manufacturing equipment. The U.S. should provide leadership to these nations and their companies to strengthen trade outside of China and beyond Chinese influence. As a leader and innovator in the semiconductor industry, the U.S. should resume its position as the world’s leading manufacturer of semiconductors.
About The Co-Author
JEFF FERRY is Chief Economist at the Coalition for a Prosperous America (CPA). CPA is the only national, bipartisan organization representing exclusively a coalition of domestic manufacturers, labor unions, and family farm groups dedicated to rebuilding U.S. manufacturing and broadly restoring American prosperity. Ferry is an economist, author, and former technology executive. From 2005 to 2011, he served as a marketing executive at Infinera, a U.S. manufacturer of optical networking systems that designs and manufactures photonic integrated circuits in Sunnyvale, California. In 2019, the CPA economics team won the Mennis Award from the National Association for Business Economics for a paper, Decoupling from China: an economic analysis of the impact on the U.S. economy of a permanent tariff on Chinese imports.
CPA Annual Meeting
China Tech Threat Expert Roslyn Layton To Speak At CPA Annual Meeting
March 18, 2021
By Kenneth Rapoza, CPA Industry Analyst
Layton recently wrote a white paper with CPA’s chief economist Jeff Ferry on the global semiconductor industry, an industry China is keen to dominate like it does the rare earths that go into your EV, the solar panels on your rooftop, and apparel industry, to name a few. (The paper is titled, “Maintaining US Leadership in Semiconductors and Countering China’s Threats.”)
Layton will be speaking about tech supply chains and the China tech threat at CPA’s Annual Conference, which will go virtual on March 23 and run until March 26. She will be part of the March 25 panel on tech and solar titled How Can US Technology R&D and Manufacturing Contribute to US National Security.
China’s tech prowess is not all due to the genius planning skills of the CCP, or the general smarts of China engineers. Some of it is due to IP theft. A lot of it has to do with US policies that have “purposely enabled” the offshoring of jobs and valuable assets, she said. Moreover, the US can be too lax to enforce existing rules. “Consider the national and international laws controlling the export of advanced semiconductor equipment to military users and uses. Firms like KLA, Lam Research and Applied Materials are selling equipment to known military fabs in China,” she said, naming Yangtze Memory Technologies and DRAM memory maker Changxin Memory Technologies.