Commerce Department Reportedly Focused on SMIC, But What About YMTC and CXMT?

Reuters reports that the Commerce Department is considering banning exports of chipmaking tools to Chinese factories that make advanced semiconductors at the 14 nanometer node and smaller. This would significantly impact the ability of Chinese military-linked chipmaker SMIC from making the most advanced chips. The threat of SMIC is already clear. In a widely covered report provided to federal officials, James Mulvenon and his SOSI colleagues determined that SMIC – the largest and most sophisticated Chinese government-owned semiconductor maker – has multiple close ties to the People’s Liberation Army (PLA). Specifically, PLA researchers use SMIC chips and processes, indicating it is tailored for their purposes. For example, radiation hardening – which is used for military and space purposes – employ… Read More

Estevez Senate Hearing: Mixed Messages on YMTC Continue

Bureau of Industry and Security (BIS) Under Secretary Alan Estevez testified to the Senate Banking Committee on Thursday about issues related to U.S. Export Controls. There is still no clarity what the U.S. government’s stance is on Chinese military-linked chipmaker YMTC. Senator Mark Warner of Virginia told Estevez that American memory chip manufacturers have complained to him about YMTC’s activities, which he said are “typical of a lot of the new Chinese memory and chip-related firms.” That is to say, they are tied to the Chinese military and benefit from massive subsidies designed to kill off foreign competitors. Sen. Warner also noted a recent Financial Times story detailing YMTC’s ties to Huawei, the Chinese telecommunications firm on the Commerce Department’s… Read More

8 Solutions for Mitigating the Threat of an Apple-YMTC Deal

Last week China Tech Threat and the Coalition for a Prosperous America released the report Silicon Sellout: How Apple’s Partnership with Chinese Military Chip Maker YMTC Threatens American National Security. In our first blog post, we detailed Apple’s motivations for doing business with YMTC. Our second post outlined the risks of this partnership. Policymakers inside the U.S. government have multiple options to mitigate the damage from a YMTC-Apple deal. Three of them are most important: 1) Restrict technology exports to and imports from YMTC (Best option) The best, most effective protection of national security restricts U.S. technology exports to and imports from YMTC. This requires three steps: (a) adding YMTC to the Entity List; (b) creating a Foreign Direct Product… Read More

BIS Leader Previews New Civil Penalties for Export Control Violations

The Commerce Department’s Bureau of Industry and Security’s (BIS) Assistant Secretary for Export Enforcement, Matthew Axelrod, sounded all the right notes at a speech to the Society for International Affairs on May 16th. Recognizing that adversaries like Russia and China advance their own interests at the expense of the United States, Axelrod previewed strengthened civil penalties from BIS designed to deter American firms from violating export control laws. The proposed new penalties include: BIS publicly disclosing which companies it investigates for export control violations when a case opens, not when it is resolved, often years later Forcing companies to admit wrongdoing if they are found to have violated export control laws Increasing financial penalties for violations These ideas are welcome… Read More

China Tech Threat Applauds Confirmation of Alan Estevez to Lead BIS

China Tech Threat applauds the confirmation of Alan Estevez to lead the Department of Commerce’s Bureau of Industry and Security (BIS), which is the most important agency most Americans have never heard of. Mr. Estevez brings unprecedented experience to the role with some 30 years in defense, supply chain, and logistics. It has been 5 years since there was a confirmed BIS Director, and 9 months since Mr. Estevez was nominated. The clock has been ticking, and as Mira Ricardel, former Deputy National Security Advisor and BIS Under Secretary for Export Administration, told us, “The only parties that benefit from a lack of senior leadership at BIS are our adversaries.” China Tech Threat Co-Founder Roslyn Layton, PhD welcomed the news… Read More

CTT Conversations: The NVIDIA Hack and the National Security Catastrophe

The hack of NVIDIA has exposed the blueprints of a $580 billion semiconductor juggernaut, putting some of America’s most valuable chip designs at risk of appropriation by Chinese government entities and others. CTT sat down with Dylan Patel, a leading semiconductor industry analyst and Daniel Markus, lead China Task Force staffer to discuss mitigating the impact of this hack. Patel provided an overview of the Nvidia hack and the implications pertaining to Chinese semiconductor firms. Patel explained, “Nvidia’s software is best in class, and hackers have exposed Nvidia’s proprietary designs and put them in the public domain. Now Chinese AI firms and others can kick start their own R&D and catch up with ease… It’s virtually impossible to protect yourself… 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