Episode 19: U.S. expanded export controls on semiconductors

We are joined by our colleague Ajay Kuntamukkala  on this one-year anniversary of the October 2022 semiconductor export control rules to discuss two new interim final rules (IFRs) by the Bureau of Industry and Security (BIS) aimed at closing perceived loopholes in the 2022 restrictions.

 

The first IFR covers restrictions on advanced computing items and supercomputers (available here), and the second IFR covers restrictions on semiconductor manufacturing equipment (available here) – both of these rules become effective on November 17, 2023. 

 

We unpack how these new rules amend the Export Administration Regulations (EAR) with new restrictions on the export, reexport or transfer (in-country) of certain semiconductor and advanced computing items to China and Macau, as well as expanding license requirements for semiconductor manufacturing equipment to additional countries. We analyze the new licensing requirements imposed on entities that may be operating worldwide but that are “headquartered in” (a term not yet defined in the EAR) certain listed countries. We consider the expansion of the U.S. persons rule, dive into the technical details of the new parameters (lowered thresholds) that determine restricted chips, and discuss export control harmonization among allied countries, including recent Dutch export controls issued in September. Finally, we tackle how the new rules might impact the U.S. chip industry as well as China’s own burgeoning chip industry (we also flag the recent release of the latest Huawei smart phone).