BIS Official Says Chip Controls Will Delay, Not Stop, China’s Tech Development

U.S. export controls will slow China’s innovation efforts, but they'll never “stop” the country from advancing technologically, Bureau of Industry and Security Undersecretary Alan Estevez said.

Speaking during an event last week hosted by Georgetown University’s Center for Security and Emerging Technology, Estevez stressed that China is “willing to spend a lot of money” on its advanced technology sectors, including its chip industry, to catch up with the U.S. and other chip and chip-equipment producing nations. The U.S. is “going to slow that down and impose costs and impose time with those costs,” Estevez said. “But eventually, they'll get there.”

He pointed to China’s semiconductor breakthrough earlier this year, when Huawei announced a new phone made with a 7-nanometer chip (see 2310060065 and 2310060062). Commerce Secretary Gina Raimondo at the time suggested to Congress the U.S. was caught off guard by the announcement (see 2309190052).

Estevez said BIS depends partly on government-gathered intelligence to assess both the state of China’s technology development and the effectiveness of U.S. export controls. That has produced “mixed results, quite frankly,” Estevez said. “But they're working at strengthening that capability.”

He also said the U.S. believes China’s production yields on the new chip are “pretty low,” but the “yields don't have to be huge for military capability.”

“All we're doing is putting up impact time,” he said. “It's going to cost them more, and it's going to take them longer to achieve the same outcome that we could achieve with the equipment and capability we have.”

BIS also assesses the effectiveness of its controls through conversations with multinational companies doing business in China, Estevez said. He said he gets “lots of feedback, including from the companies that I'm regulating,” who tell him whether China already has developed a chip with similar capabilities to a chip that the U.S. is thinking of making subject to export controls, which would render the control useless and would only hurt U.S. exports.

“So in their own self interest,” chip companies are “passing that information” to BIS, Estevez said. “And I appreciate it, and I'll give them credit for doing that.”

After gathering intelligence and information from the industry, BIS will make “an assessment” about the effectiveness of its controls. “Sometimes we get surprised,” he said. “But for the most part, I think that's holding up.”

He added that BIS had many conversations with chip companies before the agency published its updated semiconductor controls in October. “We spent a lot of time working with the companies, learning what their plans were, learning what the dynamic is of this chip versus that chip,” Estevez said. “I learned more about chips in the last year than I ever, ever, ever, ever, ever, ever wanted to.”