SMIC’s Boom Shows Last Year’s Export Controls Haven’t Properly Limited the PRC’s Semiconductor Capabilities

A year ago on October 7, the U.S. government seemed like it was getting tough when it issued  long-awaited export controls targeting the Chinese chip sector. But, one year in, it is now evident that these restrictions have not been adequate to stop China from making major chip advances or positioning itself to dominate the global semiconductor space. As Kate O’Keefe and Asa Fitch report in the Wall Street Journal, Chinese semiconductor maker SMIC is under some form of sanctions from the Department of Defense, the Department of Treasury, and the Department of Commerce. But it still took in $1.5 billion in 2022 from American semiconductor design companies. That revenue can be plowed back into SMIC’s research and development process… Read More

Ca$h Over Country: Biden Administration Must Stop U.S. American Chipmaker

With Secretary of Commerce Raimondo visiting China this weekend, Dr. Roslyn Layton penned an op-ed for the National Security Institute demanding the Biden Administration stop American semiconductor equipment manufacturers from profiting on the Chinese legacy chip sector. Rather than seek new economic cooperation with China, Dr. Layton argues the Secretary should be focused on preventing the sale of some of the world’s most sensitive tech equipment to legacy chipmakers. The problem is that three American companies – Applied Materials, KLA, and Lam Research – have made billions selling their chipmaking tools, including for legacy chips, to China. Dr. Layton notes: “As can be documented from public data, these three companies have grown their combined revenues from China by 102% between… Read More

Biden Administration Finally Acknowledges Legacy Chips; Will Action Follow Soon Enough?

Up to this point, the U.S. has been laser focused on squeezing China’s ability to acquire and manufacture advanced semiconductors. Legacy semiconductors were not in their purview. That seems to be changing as Bloomberg reports that the U.S. and Europe are now “growing alarmed by China’s rush into legacy chips.” This encouraging development comes on the heels of comments by Commerce Secretary Gina Raimondo at a recent AEI event, where she acknowledged China’s massive investment in legacy chips, called it a problem, and said the U.S. and its allies need to get ahead of it. We’ve written extensively on the value of legacy chips, which are critical to national security and many other purposes. To put it plainly, U.S. policy shouldn’t focus exclusively on one… Read More

5 Questions for Tomorrow’s Hearing on The Biden Administration’s PRC Strategy

Tomorrow, the House Select Committee on the Chinese Communist Party (CCP) will hold a hearing on “The Biden Administration’s PRC Strategy.” With Thea Rozman Kendler, Assistant Secretary of Commerce for Export Administration, set to appear before the Committee, it is virtually certain that lawmakers will probe the activities of the Bureau of Industry and Security (BIS). Here are some questions we’d ask Kendler with a focus on legacy chips, a critical technology segment that China is moving fast to dominate: China is ramping up its ability to produce legacy-node chips. Technology analyst Dan Wang wrote in the New York Times this weekend, “…a world in which Chinese companies dominate the production of mature chips — driven directly by American policy… Read More

Russia Tech Export Restrictions Have A Weakness: No BIS Leader Yet 

The centerpiece of President Biden’s new round of Russia sanctions is a complete embargo on selling semiconductors to Russia. While the sanctions by the Commerce Department’s Bureau of Industry and Security (BIS) will deliver a powerful punch to Russia, they also expose a weakness: BIS, the enforcer of export controls as tools for our national security strategy, has no leader at the top at this critical time.   President Biden nominated Alan Estevez to serve as Undersecretary for Industry and Security seven months ago, but Congress has not yet held a vote to confirm him. This already concerning vacancy at the top of “the most important agency most Americans have never heard of,” creates a glaring hole in the United States’ export control regime, hindering its… Read More