New Semiconductor Export Controls Coming Into Focus

Expansive controls the U.S. levied this month on exports of advanced computing technology to China have reverberated across the global semiconductor industry, requiring firms to immediately suspend certain activities within the country unless they secure exemptions.

Much attention has focused on a provision that prohibits “U.S. persons,” including both U.S. citizens and green card holders, from supporting advanced semiconductor development in China without a special license, leaving personnel based in China in immediate danger of violating the controls.

At an event last week to unveil the Biden administration’s new National Security Strategy, National Security Advisor Jake Sullivan described the controls as part of a “small yard, high fence” approach that targets protections at particular technologies.

“Chokepoints for foundational technologies have to be inside that yard, and the fence has to be high — because our strategic competitors should not be able to exploit American and allied technologies to undermine American and allied security,” he added.

The controls also affect businesses in countries outside the U.S. and China because they apply to products that use U.S.-made components. The administration reportedly pressed other countries to implement similar controls but ultimately decided to proceed unilaterally without securing public commitments from them.

A spokesperson for China’s Ministry of Foreign Affairs argued the U.S. move abuses export controls to “wantonly hobble Chinese enterprises” and stated China would “work with the international community to oppose unilateralism, protectionism, and bullying practices in sci-tech.”