US considers taking control of global chip exports

February 18, 2020 //By Peter Clarke
US considers taking control of global chip exports
According to a Reuters report the US government is considering changing regulations so that any chips made with US manufacturing equipment or software – effectively all complex ICs – must be licensed by the US for export to China.

The move would solidify the Trump administration's restrictions on telecommunications company Huawei and its Taiwan-based foundry supplier TSMC.

At present, there are internationally agreed limitations on so called dual-use products and a threshold of US IP included within those products. However, the United States is no longer such a significant provider of IP and TSMC has continued to supply Huawei, even though companies such as ARM have discontinued cooperation with telecom giant (see TSMC says not fazed by lowering of 'dual-use' threshold ).

However, a change to cover the involvement of US chip making equipment and EDA software, would effectively catch all IC design and manufacturing of any complexity.

Reuters has reported that such a change is under discussion at high-level US government meetings being held this week and next. The proposal has been drafted but may not be approved.

The regulation that is up for amendment is the Foreign Direct Product Rule, which subjects some foreign-made goods based on US technology or software to US regulations, Reuters said.

Although the leading manufacturer of lithography is European – ASML Holdings – a chip production line includes many different types of equipment and almost none are without equipment from US suppliers such as Applied Materials, KLA and Lam Research. US companies Cadence Design Systems and Synopsys are the leading suppliers of EDA software.

TSMC has always said it would follow the law. As the United States is effectively the guarantor of Taiwanese independence from China problems between TSMC and the US administration would quickly escalate to become political.

Related links and articles:

US should take control of Ericsson, Nokia, says politician

Huawei stockpiling chips, expecting tighter US sanctions

TSMC says not fazed by lowering of 'dual-use' threshold

US lobbied hard to deny China EUV lithography


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