BIS Considering Tighter Chip Export Rules, Says Agency Official

The Commerce Department Bureau of Industry and Security is reviewing the types of semiconductors and chipmaking equipment that can be exported to China to determine whether it needs to tighten those restrictions, said BIS Undersecretary Alan Estevez. Speaking during a Senate Banking Committee hearing Thursday, Estevez said the agency is considering tightening the “cut-off point” of semiconductors that are subject to strict export licensing requirements.

“I'm conducting a complete review over those policies within BIS right now,” Estevez said, noting BIS is discussing the potential new restrictions with other agencies: “There is a red line on what we would allow the Chinese to access.”

Lawmakers previously asked BIS to tighten its export control rules on chip exports, including in March, when two Republicans said BIS should revise its restrictions for China’s SMIC by imposing a policy of denial for all applications for items capable of producing at 16-nanometer nodes. Semiconductor Manufacturing International Corp., China’s top chipmaker, is subject to a license review policy of denial for items used to produce semiconductors at advanced technology nodes of 10 nanometers or below.

During the hearing, several lawmakers said BIS should be doing more to restrict sensitive technology exports, including to China. Sen. Steve Daines, R-Mont., said companies on the Entity List are “still finding a way” to access American intellectual property. “BIS can be doing more right now, I believe, with their existing authorities,” Daines said.

Sen. Mark Warner, D-Va., said Chinese semiconductor manufacturer Yangtze Memory Technologies should be on the Entity List. Warner said “a lot” of American manufacturers have “complained” to him about YMTC. “I urge the Commerce Department to look very carefully at YMTC’s activities,” Warner said. “I think YMTC deserves that investigation -- and at the end of the day -- that designation.”

Though Estevez declined to say whether BIS is investigating YMTC, the agency is reportedly looking into whether the company violated U.S. export controls by supplying chips to Huawei (see 2204270056). “If we find violations,” Estevez said, “we will put companies on the list.”

Estevez was asked several times whether BIS needs new authority to carry out its export control work. He said the agency has sufficient power under the Export Control Reform Act but could benefit from more resources. “I could always use more technologists, more enforcement officers and a larger budget to use some tools that can give us access to supply chain mapping, for example,” Estevez said.

He also said Congress shouldn’t act on a proposal that would require some interagency export licensing discussions to be made public. Estevez said the proposal would publicize how each agency voted in the first round of talks over a license application. “We believe that our interagency process works very well,” he said, “and that it needs to remain that way.”