Earlier today the Bureau of Industry and Security (BIS) announced an interim final rule to be fully released on October 13th. The rule will amend the EAR for controls on “controls on advanced computing integrated circuits (ICs), computer commodities that contain such ICs, and certain semiconductor manufacturing items” as it relates to China. This is paired with a renewed emphasis on controls targeting supercomputer and semiconductor manufacturing end uses.
Yi-Chi Shih, a California resident and former president of Chengdu GaStone Technology Company (CGTC), was attempting to steal monolithic microwave integrated circuits (MMIC) from a US based company to ship back to China for reproduction by CGTC. Shih used a front company he operated called Pullman Lane Productions, LLC. Pullman was being financed by the PRC government for the acquisition of MMIC technology.
The semiconductor market is quite competitive and any advancement in technology could set you ahead of peers. This incentive drove employees from United Microelectronics Corporation, Inc. (UMC), a Taiwanese foundry company, to steal trade secrets from the American company Micron Technology, Inc. (Micron). In 2018, the FBI linked the representatives at UMC to the PRC’s state-owned semiconductor firm Fujian Jinhua.
New export controls on semiconductors to Russia, in combination with sanctions impacting the Russian economy. Some estimates put the trade of semiconductors to Russia at $50 billion. But these impressive number bely the fact that Russia buys end products with chips and integrated circuits and does not have a strong industrial base to produce cutting edge semiconductors themselves despite attempts by the Kremlin to build a domestic production capacity.