Last year, the United States took a major step toward the goal of addressing the dangers posed by Chinese semiconductor makers by adding YMTC to the Entity List. We hope this action is a marker of a new era of seriousness and action as it relates to countering Chinese chip-related threats. The bipartisan momentum must continue to build, and revising Section 5949 of the NDAA is a necessary step.
Section 5949 of the NDAA prohibits the U.S. government from procuring or using any parts, products, or services that include semiconductors manufactured by specific Chinese companies that represent security risks. Writing in the Washington Examiner recently, former National Security Adviser Robert O’Brien addresses the importance of stopping Chinese chips, especially those from China’s “bellwether” semiconductor firms, from entering federal government systems:
U.S. reliance on Chinese chips from companies such as SMIC, YMTC, and CXMT poses a national security risk to our nation that will only increase if we do not remedy the situation immediately. The idea that “made in China” chips are embedded in U.S. defense and intelligence systems, national critical infrastructure, and government networks is both absurd and, unfortunately, our reality. A single compromised chip in the right place can provide our adversaries with unfettered access to critical platforms.
O’Brien’s analysis is correct, and we hope he will discuss the issue further at his upcoming talk at the Heritage Foundation in February on how the United States can win the tech race against China. Moreover, O’Brien rightly notes 5949’s shortcomings, especially the fact that it “does not affect wide swaths of services performed by companies supporting the federal government that would be of great interest to our adversaries.” Congress unfortunately punted on tougher language at the end of last year as lobbying efforts from lobbying efforts by certain federal contractors prevailed.
Congress can rectify its mistake, and it has a new tool in its arsenal to drive progress. The House Select Committee led by Rep. Mike Gallagher (R-WI) has identified technology issues as a prime space for its focus. As Rep. Gallagher told China Tech Threat, “The Chinese Communist party presents a grave threat to American sovereignty and our national security. From stealing intellectual property and good-paying American jobs to the malign influence of TikTok and other CCP-owned technology, the Chinese Communist Party is looking to take its techno-totalitarianism global.”
We look forward to seeing how the Committee will help educate the public and advocate for actions to limit the Chinese semiconductor industry’s ability to threaten American jobs and national security. In addition to strengthening Section 5949, Congress should continue to press the Commerce Department to impose YMTC-style export controls targeting dangerous companies like CXMT. With bipartisan momentum to tackle China issues at an all-time high, there could not be a better chance to continue to the good work started in 2022.