YMTC’s Chip Breakthrough Shows Weakness of U.S. Export Controls

Last year, the U.S. imposed export controls designed to curtail the flow of American chipmaking technology to Chinese semiconductor firms. Soon after, one of China’s top chipmakers, YMTC, was added to the Entity List. Both actions were long awaited, but were they too little, too late? The evidence is mounting and suggests the federal government has much work ahead of it to properly curtail the Chinese semiconductor industry while also bolstering American production.The latest example comes from TechInsights, which recently reported that it discovered “the world’s most advanced 3D NAND memory chip in a consumer device.” Shockingly, its manufacturer is YMTC—a company with proven ties to the Chinese military. The fact that YMTC can continue to make world-leading chips… Read More

New Report Warns of Chinese Control of Legacy Chips

The Silverado Policy Accelerator is out with an excellent new report on how the Chinese government is using subsidies to grow China’s semiconductor industry, put Western firms out of business, and make the world dependent on Chinese legacy (or “foundational”) chips.Foundational Fabs: China’s Use of Non-Market Policies to Expand Its Role in the Semiconductor Supply Chain hits on many of the same notes which China Tech Threat’s Every Chip Matters did earlier this year. As Foundational Fabs’ executive summary states:The Chinese industry is already impacting the global industry by putting downward pressure on prices for some products and capturing market share. This is critical as foundational semiconductors account for three-quarters of global foundry capacity, are essential to applications… Read More

Advanced! Advanced! Advanced! What About Legacy Chips?

If you watch what comes out of the Commerce Department on semiconductors – especially as it relates to CHIPS and export controls – you’ll notice an emphasis on advanced and leading edge chips. The U.S. aims to be the “premier destination” for leading edge chips and has “been intentional” about limiting China’s access to advanced chipmaking equipment. But what seems like an almost exclusive concentration on leading edge chips highlights two problems:First, all chips matter. Advanced and leading edge chips are no doubt important, but we can’t forget about legacy chips. These critical chips are in automobiles, planes, home appliances, medical devices, military systems, and more. A new report from CSIS underscores their strategic importance: “Despite the name, legacy… Read More

Five Pressing Questions for BIS Director Alan Estevez

The House Foreign Affairs Committee (HFAC) announced that BIS Under Secretary Alan Estevez will participate in a hearing on Tuesday morning at 10 AM on “Combatting the Generational Challenge of CCP Aggression.”The hearing should come as no surprise. Last June, Congressman McCaul told reporters that he planned to “focus like a laser on export control issues” once he became Chairman, adding that BIS “puts too much emphasis on industry and very little if nothing on security and that has to change.”Given his national security background, which is much needed at BIS at a time like this, China Tech Threat supported a vote for Mr. Estevez in the lead up to his March 2022 confirmation. We also applauded BIS’s… Read More

Despite U.S. Export Controls, SMIC Posts Record Revenue

Last week, China’s largest chipmaker, Semiconductor Manufacturing International Corp (SMIC), recorded record revenue with $7.2 billion in earnings and said it’s moving forward with expansion plans despite uncertainty in the industry. For the second year in a row, SMIC’s earnings rose over 30% despite ongoing U.S. sanctions and export controls.Contrast that with fellow Chinese chip bellwether YMTC, which has faced significant headwinds since its placement on the Entity List late last year. Several reports point to the state-owned chipmaker laying off employees, dramatically slashing equipment orders, and potentially halting expansion plans.What gives SMIC an edge? As Nikkei Asia reports, “Capital expenditure will mainly be spent on expanding capacity for mature, or older generations, of chips and on infrastructure… Read More

New Study Confirms China’s Ability to Spy… Through the Fridge

Chinese spy balloons have been dominating headlines over the past few days. As the New York Times reported, “Balloon Incident Reveals More Than Spying as Competition with China Intensifies.” While the U.S. recovers the balloon and takes a closer look at the findings, it will not only be interesting to know what may have been communicated to China, but also what technology was used to do it. For example, were there any chips from China’s bellwethers (SMIC, YMTC, and CXMT)? All that said, this is not the only news of China spying that should have us up in arms.Late last month, The Telegraph and others reported, “China Can Use People’s Fridges and Laptops to Spy on Them, UK Warned.”… Read More

Should Congress Revisit, Toughen Up Section 5949 of the NDAA? A Former National Security Advisor Weighs In

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… Read More

Biden Administration on China and Export Controls: Economic Cold War or Reflection of Reality?

As China Tech Threat readers very well know, the Biden administration issued long-awaited export controls in October designed to restrict the People’s Republic of China’s (PRC) ability to purchase or manufacture high-end chips. Some have criticized the move as “a declaration of an economic cold war.” Daleep Singh, a former Biden administration Deputy National Security Adviser, is weighing in. Singh recently wrote in The Economist that “America is simply adapting to intensified competition for pre-eminence in the foundational technologies of our time.” We agree. From both national security and economic standpoints, Chinese dominance and superiority in the semiconductor space is dangerous, and the Biden administration has taken actions to prevent that from happening.Singh also calls for the Biden administration… Read More

UPDATED: Rep. Gallagher Leads New Bipartisan Panel in Congress to Counter Chinese Threats

Countering Chinese aggression will be a major issue that Republicans will pursue in 2023. In that light, it should not be surprising that now-Speaker Kevin McCarthy selected Rep. Gallagher as Chairman of the House Select Committee on China at the end of last year. Gallagher’s expertise and his ability to build bipartisan support on national security issues makes him the right man for the job.For seven years, Gallagher served as an Intelligence Officer in the U.S. Marine Corps, a tenure that included two deployments to Iraq. In Congress, he has served as a Ranking Member on the House Armed Services Committee, vocally defending America’s national security interests. Most importantly, he has pursued action against China-related threats, including problematic Chinese… Read More

New Year, New BIS Standards to Safeguard U.S. National Security

The end of 2022 brought good news for those working to keep Americans safe from Chinese tech threats: the federal government banned TikTok on federal government devices, and several state governments did the same. Most importantly, the Bureau of Industry and Security (BIS) added Yangtze Memory Technologies (YMTC) and 35 other Chinese entities to the Entity List, depriving them of American technologies that will almost find their way into the hands of the Chinese military.This major listing isn’t just a needed national security action – it sets a new standard for how BIS should approach Chinese tech companies. There is no doubt Under Secretary Alan Estevez and his team put loads of work into the process, and learned lessons… Read More