February 2022 Newsletter

Release Of BIS Recommendation #3: Strengthen SME Restrictions To Prevent China’s Self Sufficiency.

We released our third in a series of policy recommendations meant to help leaders at the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) prevent adversaries from acquiring and weaponizing sensitive U.S.-made technologies. CTT’s third recommendation calls for the next BIS head to prioritize semiconductors and Semiconductor Manufacturing Equipment (SME) with trade restrictions, strengthen the export control regime and eliminate holes in the framework, and implement unilateral controls in tandem with broader multilateral efforts. The report cites Chinese chipmaker examples like Yangtze Memory Technologies Company (YMTC), which lawmakers have called a “PRC state-owned national champion”—that have sought to circumvent U.S. export controls designed to prevent adversaries like the PRC from acquiring chips that could be weaponized or otherwise exploited against U.S. national security and economic interests.

Does The SK Hynix Deal Pose A National Security Risk?

The sale of Intel’s NAND memory and storage unit to South-Korean based SK Hynix received CFIUS approval in March 2021, but the deal is in the hot seat nearly a year later because China approved the deal with “conditions,” including a troubling one to “help a third-party competitor enter” the market. China Tech Threat (CTT) has urged CFIUS to revisit their prior approval and ensure that the transaction still fulfills the national security requirements to protect critical U.S. technological assets. For more on the deal and the implications it has for our national security, visit our new resource page here

Event Video: Panelists Warn SK Hynix Deal Could Allow Chinese Government To Steal American Technology.

In a February 8 forum, China Tech Threat Co-founder Dr. Roslyn Layton convened Coalition for a Prosperous America Chief Economist Jeff Ferry and former Assistant Secretary for Industry and Analysis at the U.S. Department of Commerce’s International Trade Administration Nazak Nikakhtar to analyze what concerns the SK Hynix Deal raises and what actions can and should be taken by CFIUS, Congress, and/or other government agencies. Ms. Nikakhtar said the U.S. government “very much has the legal authority” to bring the sale back under CFIUS review,” and warned “semiconductors are part of China’s national strategy… The transfer of semiconductor technology from the United States to China is what enabled China to race ahead in hypersonic [missiles] – two years ahead of us. Event highlights are available here

Axios Cites CTT Report On States Using Risky Chinese Tech.

A recent Axios story on work by New York Representatives Rep. John Katko, ranking member on the House Homeland Security Committee, and Rep. Andrew Garbarino to raise alarm about states using Chinese tech featured CTT’s report on states purchasing risky tech products from Lenovo and Lexmark. The Axios report quotes CTT co-founder Dr. Roslyn Layton who stated: “If you are a state chief information officer, there is no place to go in the federal government to really understand the threats you face and what you should do to ensure security. At the federal level we could definitely do more to help empower the many state actors.”

Team USA Tech Warnings Should Be Heeded By Americans At Home Watching The Olympic Games.

In a Forbes column about the tech warnings issued to Team USA traveling to Beijing for the Winter Olympic games, Dr. Layton uses the attention to warn about threats from Chinese technology used everyday in our homes, businesses and government offices. “While the Olympic warning is necessary and appropriate, threats to personal safety and security from technology from firms owned and affiliated with the Chinese government are just as real and prevalent to ordinary Americans every day in the USA,” writes Layton.