The Biden administration is set to extend existing exemptions for leading semiconductor manufacturers from South Korea and Taiwan, allowing them to continue and expand their chip-making operations in China, The Wall Street Journal reports. This move comes despite concerns that it may undermine U.S. export controls aimed at slowing China’s technological progress.
Alan Estevez, undersecretary of commerce for industry and security, announced the decision at an industry gathering last week. The exemptions, initially granted for one year in October last year, were provided to several companies, including South Korea’s Samsung Electronics and Taiwan Semiconductor Manufacturing TSM, who have invested billions in building plants in China.
The decision to extend the exemptions reflects the challenges faced by U.S. authorities in isolating China from high-tech goods in a highly integrated global industry. The U.S. has been trying to keep advanced chips out of Chinese hands by limiting exports not only from American manufacturers but also those made by allies.
However, U.S. and foreign chip makers have resisted these efforts, and governments in Asia and Europe have also pushed back. The most vocal criticism has come from South Korea, whose largest export market is China.
While some in Washington, particularly Republican lawmakers, advocate for a tougher stance on China, U.S. officials have recently stated that they do not seek to decouple from China. They aim to limit restrictions to highly strategic technologies, acknowledging that a full separation from China’s economy would be disastrous for both countries.
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