Trade Alert

BIS Cracking Down on Chip Exports

By In USA Trade Alerts On 13th October 2022

Starting October 7th, 2022, the Bureau of Industry and Security (BIS) is cracking down on exports of advanced computing integrated circuits (ICs), computer commodities containing ICs, and certain semiconductor manufacturing items destined for China.

The intention is to limit China's access to high-end chips that can be used to further develop AI and supercomputer capabilities for uses like military modernization and human rights abuses, contrary to U.S. national security and foreign policy interests.  

The list of actions in the notice is lengthy. Among the actions, the notice implements an end-use control for certain items intended for a supercomputer located in or destined for China, expands the scope of licensing requirements for 28 existing entities on the Entity List that are located in China, and requires licensing of specific activities of U.S. persons that support the development or production of certain ICs in China. We recommend reviewing the notice for detailed information.

To minimize the short-term impact on the semiconductor supply chain, BIS will establish a Temporary General License to permit specific, limited manufacturing activities in China related to items destined for use outside China and is identifying a model certificate that may be used in compliance programs to assist in conducting due diligence.

The U.S. is taking a leadership role by implementing these new controls to slow the advancement of chip manufacturing in China so that the U.S. can maintain a lead in this industry. The new restrictions are not expected to impact commercial products significantly.   

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