U.S. Courting Allies to Ban Chip Exports to China.

• Author: Carberry, Sean

The Department of Commerce decided in early October that the threat of China building or acquiring high-end chips for military purposes was simply too urgent and it had to impose new export controls. Now, the department is focused on getting allies to impose similar measures.

The Commerce Department's Bureau of Industry and Security issued two new export control rules Oct. 7 to ban the export of high-end chips, tools and components used to make chips 14 nanometers or smaller to China. The restrictions also ban U.S. persons from supporting the development or production of chips at certain Chinese facilities without receiving a license.

"Letting a foreign adversary use U.S. technology or allied technology ... just goes against the grain for me," said Alan Estevez, undersecretary of commerce for industry and security, during a discussion at the Center for a New American Security on Oct. 27.

"We've really targeted and crafted this rule to go after what was really a subset of the semiconductor business," he said. "So, we've gone after the highest end semiconductors that you might need for the best sensors, best radar hopping, best seekers, best precision-guided capability, best radar-evading capability--all that and then the autonomous vehicles, AI that they're already using to suppress their own population from a human rights perspective."

The new measures--which are a similar application of the foreign direct product rule the United States used against the Chinese telecom giant Huawei--still allow for China to continue making less sophisticated chips that are used in home appliances or vehicles, he said. That said, if the rules hinder trade, that is a price to pay for national security.

"We do not balance trade with national security," he added. "When I see an action that needs to be taken for national security, I have top-down coverage to take care of that regardless of the impact."

In addition, the new rules affect the "Entity List"--companies, individuals or research organizations who the United States cannot verify are in compliance with export administration regulations.

"We put additional restrictions on 28 firms that are engaged in supercomputer development in China that were already on the Entity List," he added. "And then we added an additional rule at the same time, which says that if we are not allowed to do an end-use check on you and you go on the Unverified List because the country is not cooperative, after 60 days we can move...