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U.S. Semiconductor Industry Urges Clarification of Export Controls to China

In response to the semiconductor export control rules for China introduced in October 2022 by the U.S. Department of Commerce's Bureau of Industry and Security (BIS), stakeholders, primarily U.S. companies, have requested clarification of the rules and multilateral cooperation.


As of February 1 (U.S. time), 42 comments had been received, including comments from U.S. and European companies, U.S. industry associations, and individuals. As of February 1 (U.S. time), 42 comments had been posted, including comments from U.S. and European companies, U.S. industry associations, and individuals. U.S. companies that submitted comments include Intel, Applied Materials, and DuPont, while among European companies, the U.S. subsidiary of ASML of the Netherlands submitted comments. Industry associations also submitted comments, including the Semiconductor Industry Association (SIA), the U.S.-China Business Council (USCBC), the Information Technology Industry Association (ITI), and the Semiconductor Equipment and Materials International (SEMI). The comments have many points in common and can be generally categorized as follows


Clarification of rules: The IFR introduced in October is complex and unclear in many respects, imposing unnecessary burdens on industry, and calls for clarification of the rules. The BIS issued additional guidance after the introduction of the IFR, but industry continues to struggle to interpret the rules. The ITI noted in its comments that companies affected by the IFR expect to lose a total of $400 million to $2.5 billion in sales by 2023.


Normalization of the rulemaking process: The ITI recommends that the proposed rules should first be published, and that they should be enacted after soliciting input from industry and other interested parties, rather than becoming effective upon publication, as was the case with the IFR.


SIA has been pointing out the need for this since shortly after the introduction of the IFR. The ASML U.S. Corporation also emphasized that the introduction of extensive export controls by the U.S. alone would be contrary to the existing U.S. commitment to implementing export controls multilaterally and would disrupt the semiconductor supply chain, as well as hinder diplomatic and security objectives. The Biden administration is reportedly lobbying Japan and the Netherlands, both of which have technologies comparable to those of the U.S. in semiconductor manufacturing equipment, to introduce similar export controls to China. Some reports indicate that the three countries have reached an agreement, and SEMI has also welcomed the agreement in its comments, but no official announcement has been made by either government.


It remains to be seen how the U.S. government will proceed with the revision of the rules and multilateral cooperation in response to the submitted comments.

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