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SEMI Urges Safeguards for U.S. Exports and Innovation Regarding Foundational Technologies

As the United States government has expanded semiconductor-related export controls, companies in the global electronics manufacturing and design supply chain have had to spend considerable time and effort navigating restrictions and managing significant new uncertainties emanating from recent policies.

On November 9, SEMI submitted comments to the Department of Commerce’s Bureau of Industry and Security (BIS) urging the agency to proceed cautiously and adopt regulatory best practices and microelectronics industry recommendations to ensure that its identification of foundational technologies does not restrain U.S. innovation and exports without furthering essential U.S. national security interests.

The comments specifically respond to the August 27 Advance Notice of Proposed Rulemaking (ANPRM), Identification and Review of Controls for Certain Foundational Technologies. The Export Control Reform Act (ECRA) of 2018 required BIS identify certain emerging and foundational technology that is “essential” to U.S. national security and requires such technology to be controlled to China and other nations subject to a U.S. arms embargo. Congress did not provide a specific definition for emerging or foundational technology, nor the term essential, further complicating the process to identify such technology.

BIS has already implemented or proposed several emerging technology controls and the ANPRM starts the process to identify potential foundational technology controls. The SEMI comments focus on the fundamental question of how to define foundational technology, and are organized into three main sections:

  • Requirements of ECRA
  • Guidance from ECRA
  • Regulatory best practices and industry recommendations

Applying the statutory requirements and guidance, together with best practices and recommendations, to the identification of foundational technology indicates that most semiconductor-related technology, particularly semiconductor manufacturing equipment and materials, should be outside the bounds of the foundational technology initiative. In general, most technology related to semiconductor devices, manufacturing equipment, materials and design software is not essential to U.S. national security and, in cases where such technology does present material national security issues, it is generally subject to the U.S. list review process and multilateral controls.

This technology is widely available outside the United States and due to substantial foreign availability, unilateral U.S. controls on such technology are likely to be ineffective in limiting its proliferation and harm U.S. development of or threaten U.S. leadership in this technology.

While the SEMI comments focus on the effort to identify foundational technology, the recommendations and best practices apply in all export control contexts. Several of the statements pertain to policy in ECRA, including its imposition of controls to further specific essential U.S. national security interests only after full consideration of their impact on the economy.

Other statements derive from factors ECRA requires BIS to consider, such as not seeking to control technology that’s already available outside the U.S. and not imposing controls that would harm U.S. technological development or leadership. An additional key factor is not imposing controls before multilateral controls are agreed to, nor when it is unlikely the relevant multilateral regimes will adopt similar controls, as is likely for technology that has been decontrolled by a regime.

Finally, regulatory best practices suggest that technology-based controls should not be imposed when more targeted end-use or end-user controls can address national security concerns and duplicative controls in addition to recent, significant expansions of existing controls are unnecessary.

SEMI is pleased to work with the U.S. Department of Commerce and other regulatory agencies, providing industry data, trends and perspectives to ensure export controls effectively serve national security interests without undue harm to technological development and leadership in this dynamic, globally competitive industry.

Ways to Stay Connected and Learn More

SEMI is committed to serving the global electronics manufacturing and design supply chain and present the collective voice of members to governments worldwide.

The SEMI Global Update weekly newsletter provides updates on advocacy issues and technology trends and is available to all.

Additionally, SEMI hosts live and virtual events that offer analysis and insights of geopolitical trends by industry experts, with the next opportunity to participate coming on December 3 with the SEMI CEO Webinar: Analyzing the Impact of the U.S. Election on the Microelectronics Industry.

Joe Pasetti is Vice President of Global Public Policy and Advocacy at SEMI. 

Topics: China , Congress , semiconductor manufacturing , United States , Public Policy , global electronics supply chain , semiconductor industry , semiconductors , U.S. Department of Commerce , export controls , global electronics manufacturing , SEMI Global Advocacy , webinar , virtual events , U.S national security , foundational technology , Bureau of Industry and Security , BIS , ANPRM , ECRA , Advance Notice of Proposed Rulemaking , Export Control Reform Act

 

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