Semiconductor equipment is listed! New US regulations will expand export restrictions

Date of issue:

2020-04-28

Huaqiang Electronic Network News, April 28, according to Reuters, the US government said on Monday that it will increase new restrictions on exports to China, including civilian aircraft parts and semiconductor production equipment. The new regulations will require that US companies need to obtain government licenses when selling certain products to Chinese companies involving military products, even if these products are used in civilian fields.


At the same time, the new regulations have also eliminated the exception for civil licenses for Chinese importers and the public, and Ukraine and Russia are also on the list of license exceptions. The exceptions to these licenses involve integrated circuits, telecommunications equipment, radar, high-end computers and other items. Even more serious is the third proposed rule change issued by the US government. The rule will also force foreign companies to deliver specific US goods to China, not only seeking permission from their own governments, but also seeking US approval. This may mean that products involving US technology will also need to be approved by the US government before they can be delivered to China.


On the other hand, the regulations also require US companies to submit declarations for all goods exported to China, Russia, and Venezuela, regardless of their value. Allegedly, the above-mentioned restrictive measures have been enacted since last year, and US officials decided to promote them in late March.


In a statement, US Secretary of Commerce Ross said: 'It is important to consider the consequences of doing business with countries that have a history of purchasing goods from US companies and converting them to military use.'


And Kevin Wolf, a Washington trade lawyer, said the rule change was aimed at China's military-civilian integration policy, which is to find military uses for civilian objects. Kevin said that the new rules have a broad regulatory definition of military use and users, not just limited to military organizations and entities, 'it can also be a civilian company designed to support the operation of military projects.'


Reuters believes that the regulation may damage the US semiconductor industry and the sale of civil aviation components to China.


Semiconductor equipment is listed! New US regulations will expand export restrictions


A commercial representative stated that the Ministry of Commerce is not aware of the economic impact of the implementation of the re-export licensing measures and will allow a comment period to gather information on the proposed change rules.


John Neuffer, chairman and CEO of the Semiconductor Industry Association, said the industry is concerned that broad regulations will “unnecessarily expand semiconductor export controls and bring more to our industry in the current global economic turmoil Uncertainty.' 


Regarding the restrictions on semiconductor equipment, the market is worried that TSMC will not be able to provide chip foundry services to Chinese companies such as Huawei and Ziguang Zhanrui. According to TSMC's annual report released last week, Huawei contributed 36.1 billion yuan in revenue to TSMC in 2019, a year-on-year increase of more than 80%. The proportion of TSMC's overall revenue increased from 8% to 14%, which makes Huawei the second largest customer of TSMC, second only to Apple.


When Liu Deyin, the chairman of the front desk company, was asked by a reporter about the increase in US export controls on China, he said: 'The United States is discussing the use of semiconductor equipment, but so far there has not been any specific changes to the game rules. Write to the US government, hoping not to do so, because any newly added restrictions will cause harm to the US semiconductor industry. '


Liu Deyin emphasized that TSMC itself hopes that there will be no such restrictions, and if it is prepared, it will minimize the negative impact. (Proofreading: Hobby)


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