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 able to evade U.S. defense systems.

These cutting-edge weapons require extremely powerful computing systems to develop, which rely on latest-generation semiconductors. The United States maintains a competitive advantage over China in chip design, however China is aggressively working to close the gap—often through acquiring dual-use technology.

“The trade is not illegal but is a vital link in a global high-tech supply chain that is difficult to regulate because the same computer chips that could be used for a commercial data center can power a military supercomputer,” the Washington Post article notes.

In November 2019, then-Senate Minority Leader Chuck Schumer (now Senate Majority Leader) and Sen. Cotton made a similar request of U.S. Commerce Secretary Wilbur Ross, encouraging the department to fully apply the 2018 Export Control Reform Act to prevent China from acquiring dual-use technology.

“The CCP’s strategy is to steal as much American dual-use technology as it can get its hands on…The CCP has effectively fused its military and civilian industrial bases to ensure that the People’s Liberation Army can rapidly develop and field cutting-edge military platforms,” Sen. Schumer and Sen. Cotton wrote.

The latest call-to-action comes a month after Rep. McCaul and Senator Marco Rubio urged Sec. Raimondo to apply greater Entity List restrictions on SMIC, China’s largest semiconductor manufacturer:

“It is in the U.S. national security interest to prohibit the transfer of goods that might support SMIC’s production of semiconductors, due to the company’s role in helping the CCP military’s pursuit of ‘[displacing] the United States to achieve global preeminence in the future.’”

In an op-ed for RealClearDefense last November, former Congressman Robert Pettinger and Dr. Roslyn Layton pointed out that holes in the U.S. export controls system “buys time” for Chinese state-owned companies to game the system. “Chinese companies, like Yangtze Memory Technologies (YMTC) and ChangXin Memory Technologies (CXMT)—which, like SMIC, are known to supply the PLA—continue to enjoy access to U.S.-born technology.”

Read more in Roslyn Layton’s piece for Forbes.