Implementation of Additional Export Controls: Certain Advanced Computing and Semiconductor Manufacturing Items; Supercomputer and Semiconductor End Use; Entity List Modification

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CSIA Opposes U.S. Use of National Security as a Justification to Destabilize the Global Semiconductor Supply Chain and Disrupt Free Trade in Semiconductor Markets CSIA is of the view that, despite the widespread recognition that export controls undermine the normal development of the global semiconductor industry and the calls for a halt to the escalation of export controls, the U.S. Department of Commerce rolled out additional controls set to bring greater uncertainty to the global industrial ecosystem, further disrupt the global supply chain, and jeopardize the free trade in the semiconductor industry and the market. We hope that the U.S. Department of Commerce would heed the calls and suggestions from the industry and refrain from ramping up export control measures on semiconductors. CSIA would like to offer the following comments in response to the U.S. Department of Commerce's updated export control rules: 1.We took note of the comments on "Topic 9" of the Advanced Computing Chips Rule (AC/S IFR) posted on the U.S. Department of Commerce's website, and echo the commenter's observation that "trade with China brings many important benefits to the U.S. economy and American workers." The commenter further noted that "advanced U.S. manufacturers of all sizes and their American business partners and consumers have benefited from globally integrated supply chains that have improved efficiency and lowered production costs for U.S. firms. Revenues generated in China are often reinvested in global and U.S. research and development (R&D) activities, which in turn allows U.S. companies to maintain their competitive edge over PRC and foreign competition." In our view, the additional export controls will eventually result in diminishing the investment in new technology R&D by relevant U.S. firms. 2. The new rules adjusted the parameters and drastically broadened the scope of advanced computing chips under export control, meaning a great number of chips used in medical imaging, weather forecasting, geological exploration, financial risk control and other civil sectors would not be able to obtain export licenses. It is advisable that the Department of Commerce grant exemptions for advanced computing chips for civil use in light of the intended applications and the end-users. 3.The new rules expanded the scope of control on semiconductor manufacturing equipment, covering all aspects of semiconductor manufacturing, including epitaxial growth, ion implantation, etching, deposition, lithography, coating and developing, annealing, cleaning and removal, testing and inspection, etc. As immersion DUVs are not produced in the United States, there is little merit in adding a new paragraph (a)(3) to specify that there is no de minimis level for lithography equipment. The sales and servicing of equipment for mature lines at 28nm and above shall also be impacted by the expanded scope. It is widely acknowledged that such rules would force equipment makers to develop products free of U.S. technology, leading to the emergence of two or even more independent technology routes and causing disruption to the global supply chain. 4.The scope of semiconductor equipment in the new rules has been expanded arbitrarily. For example, the heading of ECCN 3B001 is revised by adding the phrase "and equipment for manufacturing semiconductor manufacturing equipment" after the word "materials", which is way too broad, as most of the equipment are not specialized equipment for the production of advanced process equipment, and some may not even be specialized semiconductor manufacturing equipment. The overly broad scope of the new rules would not only undermine the interests of U.S. suppliers, but would also jeopardize the global semiconductor ecosystem. 5.For the contracts that have been concluded with Chinese companies prior to October 17, 2023, when the new rules came into effect, the relevant U.S. companies should honor the contracts and make deliveries. For the semic…

Filed on regulations.gov — full text not in the inline record.