Chip Makers Demand A Say On Proposed US Export Restrictions

The United States government is facing push back from the tech sector and industry groups over proposed changes to exporting of certain semiconductor technology to China.

Last week it was reported that US officials had decided to tighten rules to prevent China from obtaining advanced US technology for commercial purposes, and then diverting it to military use.

But now industry groups, according to Reuters, have demanded a say in the new rrestrictions and point out the role chips play in addressing the Coronavirus pandemic.

Group letter

Reuters reported that a letter signed by the Semiconductor Industry Association and the National Foreign Trade Council, SEMI, and six other groups, was sent to US Commerce Secretary Wilbur Ross on Monday.

The letter from the nine groups urged the US Commerce Department to allow public comment before putting the rules into effect to avoid unintended consequences.

The changes may “result in significant impacts to the semiconductor industry, its global supply chain, and the broader technology sector,” the letter reportedly said.

And the letter cited the current Coronavirus pandemic, which has just seen the UK Prime Minister Boris Johnson admitted to intensive care.

The group cited the importance of semiconductors in the fight against Covid-19.

“Semiconductors drive the functionality in advanced medical equipment used by health professionals to treat the public,” and enable telework,” the letter noted.

According to Reuters, Ajit Manocha, president of SEMI, which represents the semiconductor and electronics manufacturing supply chain, sent another letter on Friday to President Donald Trump saying the change would harm US exports of chipmaking equipment, which bring in over $20 billion a year.

The move would “serve as a disincentive for further investments and innovation in the US and lead to the design-out of US technology and components,” Manocha wrote.

He also noted the potential to create uncertainty for supply chains “critical to fighting the Covid-19 pandemic.”

US restrictions

The United States has also reportedly decided to eliminate an exception that allows certain US technology to be exported without a license to non-military entities for civilian use.

The idea is to stop China’s military from obtaining certain items without a license even if they were buying them for civilian use, such as scientific equipment like digital oscilloscopes, airplane engines and certain types of computers.

The change would also see foreign firms, that are re-exporting certain US goods to China to seek approval not only from their own governments, but from the United States as well.

“We urge the US to stop this purposeful slandering and look at China’s policy in an objective way and do more for the cooperation between our two sides,” Chinese foreign ministry spokeswoman Hua Chunying told a daily briefing last Thursday.

Neither the Commerce Department nor the White House immediately responded to requests for comment from Reuters.

However, there is concern the Chinese will simply source the needed tech from non-US sources.

It remains to be seen whether President Donald Trump will sign off on the new restrictions.

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