US reviewing chip export restrictions on China

The US Commerce Department’s office in charge of export controls is reviewing its policies around limiting sales of chip-making technology to China to strengthen national security.

“We do have some cutoff points at the most sensitive, highest-tech semiconductors, and the tooling that would make those semiconductors, being allowed to be exported to China,” said Alan Estevez, the Commerce Department’s undersecretary for industry and security.

“I am conducting a complete review over those policies within BIS right now,” he said, referring to the name of his bureau.

Estevez, speaking at a Senate Banking Committee hearing on Thursday, didn’t specify whether the review would lean toward either tightening or loosening the US controls on what can be sold to China.

But the Biden administration has sought to limit sales of chip-making technology to China while boosting support for domestic production, aiming to stifle China’s rise in that sector and strengthen US defences against supply disruptions.

US efforts include pushing Netherlands-based ASML Holding NV — the top maker of lithography systems, which are crucial in the process of creating semiconductors — to stop selling more equipment to China.

The Commerce Department is also mulling additional restrictions on chip-making tools for China’s Semiconductor Manufacturing International Corp., Reuters reported this month.

ASML already cannot sell its most advanced extreme ultraviolet lithography machines to China, as the Dutch government has not renewed its export license.

SMIC is also prevented from buying the most cutting-edge equipment from US suppliers like Applied Materials Inc. after it was blacklisted by the Trump administration.

Meanwhile, the Biden administration is pushing Congress to pass legislation that would funnel $52 billion (R893 billion) to US chip manufacturing and spur research and development to stay ahead of China.

Commerce Secretary Gina Raimondo earlier this week urged lawmakers to reach a deal before the August recess.

Estevez, a former Defense Department official and Deloitte LLP consultant, was confirmed in March to oversee the Bureau of Industry and Security, which is key to enforcing controls on strategic exports.

That includes sweeping restrictions earlier this year on technology to Russia in response to its invasion of Ukraine.

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US reviewing chip export restrictions on China