China To Win At Expense Of Flawed US Semiconductor Tech Export Policies: Report

The U.S. tech approved almost every request for exports to China and has overseen growth in sales of some critical technologies, the Wall Street Journal reports.

The U.S. continues to send China an array of semiconductors, aerospace components, artificial intelligence technology, and other items which could advance Beijing’s military pursuit, say critics. 

Recently, the U.S. beefed up export controls, sanctions, and chipmaking position in response to China through the Chips Act.

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The Senate approved a $280 billion bill to boost the U.S. semiconductor industry, including $52.7 billion in direct financial assistance for the construction and expansion of semiconductor manufacturing facilities.

However, critics advocated for an urgent regulatory revamp to respond to the threat from Beijing. Some warned against tighter restrictions on U.S. tech sales to China backfiring as allies like Germany, Japan, and South Korea could step in to fill the void.

The U.S., from November 9, 2020, through April 20, 2021, issued over $100 billion worth of export licenses to suppliers of blacklisted Chinese firms Huawei Technologies Co and Semiconductor Manufacturing International Corp. SMIC recently gained the capability to make 7-nm chips.

Recently, the U.S. weighed banning exports of chipmaking tools to those Chinese factories that make advanced semiconductors at the 14 nm node and more diminutive. It also canvassed the Netherlands to stop ASML Holding NV ASML from selling to China.

Critics argued that China’s official military-civil fusion policy, which seeks to erase the distinctions between the military and the private sector, required an immediate overhaul.

The U.S. imports of semiconductor-equipment manufacturing tools critical to making chips for both military and civilian use also radically jumped in recent years.

A U.S. research and data-analytics firm has identified tens of thousands of Chinese entities that may meet the U.S. criteria for military end-user export restrictions. 

Additionally, the agency’s list of restricted entities does not block U.S. companies from selling to its members and only requires them to apply for licenses. 

Once the U.S. issues a license, it can hardly ensure the misuse of the tech due to insufficient inspection on the part of the Chinese government, the WSJ wrote. 

In some cases, U.S. companies can sell technology to Chinese customers on the entity list without even applying for licenses. U.S. companies can also often freely sell technology to entity-listed companies in China by producing the goods in overseas factories.

Photo by mohamed hassan via Pxhere