Two key U.S. Republican lawmakers on Friday (March 19) urged the Biden administration to further tighten export restrictions on Semiconductor Manufacturing International (SMIC), which is on the U.S. Department of Commerce’s list of entities, to prevent SMIC from obtaining equipment or products from anywhere in the world that originate from advanced U.S. technology. SMIC is the largest chipmaker in China. Earlier this month, Netherlands-based Asmac (ASML) announced it would continue to sell deep ultraviolet (DUV) lithography to SMIC through 2021.
Rep. Michael McCaul (R-Texas), the ranking Republican on the House Foreign Affairs Committee, and Sen. Marco Rubio (R-Fla.) sent a joint letter Friday to U.S. Commerce Secretary Gina Raimondo asking the Biden Administration to persuade the Dutch government to block Asmac’s sale of deep ultraviolet (DUV) lithography to SMIC.
They also said the U.S. needs to reach a comprehensive agreement with these allies to harmonize export control policies and licensing decisions and to restrict future sales of technologies like deep and extreme ultraviolet lithography.
“SMIC poses a clear threat to U.S. national security because of its designation as a military company of the Communist Party of China and its inclusion in China’s national defense system and its national strategy of civil-military integration,” the two lawmakers wrote. “Given the company’s role in helping the Communist Party’s military pursue ‘global leadership in replacing the United States in the future,’ it is in the national security interests of the United States to prohibit transfers of goods that could support SMIC’s production of semiconductors.”
Request to invoke the FDPR against SMIC following the precedent set by the treatment of huawei
In their letter, the lawmakers also requested that the Foreign Direct Product Rule (FDPR) be applied to SMIC, which is listed as an entity, to cover any semiconductor manufacturing equipment that uses or incorporates any technology of U.S. origin. “We must ensure that SMIC is unable to obtain critical semiconductor manufacturing equipment from anywhere in the world.”
If the rule were applied to SMIC countries, it would mean that the company would not only be unable to obtain relevant products and equipment from the U.S., but also products or equipment produced outside the U.S. using or incorporating U.S. technology.
Two Republican lawmakers cited the precedent set by the U.S. government’s treatment of Chinese telecommunications giant Huawei.
Huawei was added to the U.S. Department of Commerce’s list of entities in May 2019. In August 2020, the Trump administration’s Department of Commerce issued a final rule amending the Foreign Manufacturing Direct Rule to expand the scope of non-U.S. items subject to U.S. export controls, further increasing the restrictions on Huawei. restrictions on Huawei.
McCaul and Rubio requested that the Biden Administration’s incoming Secretary of Commerce Raimondo follow the precedent set by Huawei and further strengthen restrictions on SMIC by applying the Foreign Direct Manufacturing Rule to SMIC, which was added to the list of entities in December 2020.
Rep. McCaul and Sen. Rubio also recommended that the U.S. Secretary of Commerce strongly consider adding deep ultraviolet light and other semiconductor manufacturing equipment to the statutory list of foundational technologies.
Last December, just after SMIC was added to the Entity List, McCaul and Rubio wrote to then-Secretary of Commerce Wilbur Ross of the Trump Administration urging him to further strengthen restrictions on SMIC.
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