Rep. Michael McCaul (R-TX) and Tom Cotton (R-AR) ask the government to restrict the sale of chip-making software to China (Communist Party)
Photo: Mike McCaul
On April 15, House Foreign Affairs Committee Ranking Republican Mike McCaul and Senator Tom Cotton sent a letter to U.S. Secretary of Commerce Gina Raimondo urging stronger restrictions on the sale of chip-making tools to China. They argue that electronic design automation (EDA) tools used to design semiconductor chips require a license for all end users under the ownership, influence or control of the People’s Republic of China.
Original letter
Dear Secretary Raimondo.
We are writing to urge you to designate electronic design automation (EDA) tools as a foundational technology and to require licensing for all end users under the ownership, influence, or control of the People’s Republic of China (PRC). There is clear evidence that companies with ties to the PRC military are using this software technology to develop advanced weapons.
According to a recent report in the Washington Post, cutting-edge U.S. EDA software was sold to an ostensibly civilian Chinese company, Tianjin Feiteng Information Technology, to design advanced semiconductor chips that will be used in supercomputers at the Communist Party’s military hypersonic weapons research and testing facility. The agency, the China Aerodynamics Research and Development Center (CARDC), has been on the Commerce Department’s list of entities for more than two decades. Despite its deep ties to the CCP’s military research and sales to CARDC, Feiteng was only added to the Entity List after the Washington Post report. We are deeply troubled that the Commerce Department would allow such important U.S. technology to be used to design weapons to target U.S. service members in the Indo-Pacific region.
As we all know, the Chinese Communist Party is implementing a strategy called “military-civilian integration” (MCF) that aims to eliminate the distinction between the defense and civilian sectors. The goal of this strategy is to ensure that the Communist Party’s military can rapidly develop and deploy the most advanced military platforms. As “civil-military fusion” is transforming the Chinese economy into a military-driven ecosystem coordinated by the CCP’s central government, many U.S. and other non-Communist companies are knowingly or unknowingly exporting sensitive technologies that are quickly handed over to the CCP’s military or intelligence services.
This recent example from Tianjin Feiteng is not the first time that a CCP military company has been documented relying on U.S. EDA tools to design advanced semiconductors. In 2019, the Commerce Department took decisive steps to effectively ban the export of EDA tools to Huawei’s subsidiary, Haise, which designs its advanced semiconductors. This ban on the export of EDA tools to Huawei is intended to hinder the ability of HiSilicon to design semiconductors that are used to further the Communist Party’s ambition to dominate global 5G telecommunications networks.
Huawei’s list of entities and the EDA software ban do not restrict other Chinese companies from purchasing EDA software licenses from the two dominant suppliers, Yihua Computer Technology (Cadence) and Synopsys. Hundreds of companies run by local Communist Party governments have reportedly invested in fabless semiconductor manufacturers and purchased large quantities of EDA software licenses from the two U.S. companies. This has contributed to a significant increase in sales of EDA tools from Yihua Computer Technology and Synopsys in China. Synopsys even held a training session at the PLA National Defense Technology University on the design of integrated circuits and field-programmable logic gate arrays, semiconductors with obvious military applications.
The U.S. government’s recent strategy against the sale of Huawei and Feiteng to the Chinese Aerodynamic Research and Development Center demonstrates the obvious flaws in the end-user based approach to export controls when dealing with the CCP. We must assume that any Chinese company receiving state investment in semiconductor technology, including EDA software licenses, could easily be coerced or induced to perform Feiteng functions for Huawei or the CCP military before becoming the target of a U.S. export ban. The export of advanced U.S. dual-use technology to any Chinese entity is, in effect, a direct delivery to the People’s Liberation Army. Our export control system should reflect this reality.
Therefore, we urge you to take the following actions to ensure that U.S. companies – as well as companies in partner countries and allies – are not allowed to sell the Communists the rope they will use to hang us all
While we support reports that the Department of Commerce has placed Tianjin Feiteng on the Entity List – and we hope to adopt a “presumption of denial” licensing policy – the Department of Commerce must supplement this action with the Foreign Direct Product Rule (FDPR). The physical list would restrict sales of EDA tools to Tianjin Feiteng, but the FDPR would require any fab worldwide using U.S. tools to obtain a license from the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) to manufacture semiconductor chips designed by Tianjin Feiteng. Any failure to use the foreign direct product rule is a stopgap measure disguised as tough action.
- The Department of Commerce should immediately designate EDA software as the underlying technology and require all U.S. EDA companies to obtain a BIS license before exporting any products to China. The State Department and the Department of Commerce should also propose similar controls in the Wassenaar Agreement (Wassenaar Arrangement).
- The U.S. Department of Commerce’s Bureau of Industry and Security should also develop a foreign direct product rule that would apply to any Chinese company designing semiconductor chips at or below 14 nanometers. This would ensure that any foundry using U.S. tooling could not manufacture a 14nm or below chip for any Chinese company without first obtaining a license from BIS.
- The Department of State and the Department of Commerce must engage the ROC government to develop a more effective end-user screening system to reduce the risk of Taiwan companies providing services and technology to the entities involved. It is not in the security interests of Taiwan or the United States for companies like TSMC ( Taiwan Semiconductor Manufacturing Corporation (TSMC)) to produce advanced semiconductor chips for the Chinese Communist military.
Recent Comments