CTT Requests Commerce Dept. Explain Policy Reversal

FOIA seeks disclosure of agency communications with top 3 chip machine makers

WASHINGTON – China Tech Threat (CTT) called on Secretary of Commerce Gina Raimondo to clarify the agency’s position on export control enforcement and sales of American semiconductor manufacturing equipment (SME) to China. The request follows Sec. Raimondo’s recent public statements, quoted in news reports, that U.S. companies equipping Chinese government-owned and affiliated competitors is “not problematic.” CTT submitted a Freedom of Information Act (FOIA) request to obtain details of meetings Sec. Raimondo held with the CEOs of the top U.S. chip machine makers.

Sec. Raimondo’s comments, including that “nothing is wrong” with U.S. companies selling SME to Chinese companies aligned with the Chinese military, contradict the Commerce Department’s Bureau of Industry and Security’s (BIS) mission of “advancing U.S. national security, foreign policy, and economic objectives by ensuring an effective export control and treaty compliance system.”

Concerned by this apparent policy reversal that directly impacts America’s economic and national security, CTT today submitted a FOIA request for materials related to an April meeting between Sec. Raimondo and the CEOs of top U.S. semiconductor equipment manufacturers Applied Materials, Lam Research, and KLA Corp, which have seen significant profits from China over the past two years. 

According to a June 2021 White House report, the three companies dominate the production of equipment necessary for manufacturing semiconductors. While the People’s Republic of China’s “Made in China 2025” initiative calls for microchip making parity with democratic countries in the next few years, the country is still reliant on these three U.S. companies to expand their indigenous production.

The U.S. government has appeared to exhibit a “Do as I say, not as I do” approach to export controls. Bloomberg reports that Deputy Secretary of Commerce Don Graves recently flew to the Netherlands to lobby the Dutch technology company ASML from selling advanced chip making equipment to China. That trip raises the question – as the Wall Street Journal also noted – if the U.S. Commerce Department is lobbying to curb exports of Dutch technologies bound for China, why won’t it restrict select high-tech American chip making technologies?

“Secretary Raimondo must either correct the record or explain why America’s leading SME companies selling to Chinese military-aligned companies is not a problem. BIS Under Secretary Alan Estevez’s comments that his long-term priority is to stop China from using our technology against us suggests that BIS was finally moving to restrict the bad actors. This much-needed change will not happen if Secretary Raimondo continues ‘business as usual’ or ‘everything’s fine as long as American companies are making money.’ Americans also deserve an explanation for why the Commerce Department will lobby another country to impose China-focused export controls but decline to institute our own.”

CTT Co-Founder Dr. Roslyn Layton

CTT just released the report, Silicon Sellout: How Apple’s Partnership with Chinese Military Chip Maker YMTC Threatens National Security which details the risks the partnership poses to American economic and national security, technology leadership, and American jobs.