BIS Prioritizing Implementation of Semiconductor Supply Chain EO

The Bureau of Industry and Security is “very busy” working to implement the semiconductor supply chain recommendations (see 2107140047) that arose from President Joe Biden’s February executive order (see 2102240068), including directives to pursue more collaboration with industry and a review of export controls and investment restrictions, a senior BIS official said. Sahar Hafeez, a senior adviser at BIS, said the agency will continue implementing those recommendations “in the weeks and months ahead.”

While the White House in June issued recommendations to help bolster domestic innovation, Hafeez also said BIS will look at how some trade restrictions may help address supply chain risks. “To protect our technological advances, we think export controls are an important tool, but multilateral controls are the ones that are most effective,” Hafeez said during a July 28 Information Systems Technical Advisory Committee meeting. “We’re also coordinating on foreign investment reviews with our allies and partners.”

Hafeez also pointed to the importance of the recently established U.S.-European Union Trade and Technology Council, which will feature working groups on emerging technologies and export controls (see 2106160061). She said Commerce hopes to use the council to cooperate on semiconductor issues with the EU and also wants to work with Japan, South Korea and other allies to “advance supply chain resiliency.”

But perhaps the most immediate priority for Commerce is pushing Congress to pass and fund the CHIPS Act (see 2107220006). The bill, which would provide funding and incentives for the semiconductor industry, has been funded by the Senate but hasn't yet been approved in the House. “We're laser focused on the House, and we encourage you all to help us get that across the finish line,” Hafeez told the ISTAC. She added that Commerce is “cautiously optimistic” the House will approve funding.

Hafeez said both the CHIPS Act and Biden’s jobs plan, which includes increased funding for the semiconductor industry and other critical goods, will help drive demand for U.S. semiconductors. She also said the agency welcomes input from industry on how they can better collaborate to support the U.S. chip sector. “We are very aware here at Commerce that the industry is facing a huge crisis,” she said. BIS is “redoubling that partnership that we have with an industry to facilitate information flow across the supply chain.”

While the global chip shortage has plagued the industry for months, it still remains unclear which chips are affected the most, Hafeez said. She said “mature node chips” are being “severely impacted,” but the shortage is impacting other types as well. “We've been trying to get more clarity. I don't know if it exists,” Hafeez said. “That's an issue that we're grappling with -- the lack of transparency.”