The Bureau of Industry and Security this week sent for interagency review a much-anticipated final rule that would make updates and corrections to its Oct. 7, 2022, China chip controls (see 2211010042 and 2210070049). BIS said the rule, sent to the Office of Information and Regulatory Affairs Oct. 10, will make “additional changes in response to the comments received” on the Oct. 7 rule, as well as “additional changes identified by BIS that are needed in order to achieve the objectives” of the controls. The Oct. 7 rule introduced new license requirements for a range of semiconductor related exports and activities involving China.

Senate Majority Leader Chuck Schumer, D-N.Y., said he spoke candidly with Chinese President Xi Jinping on a trip to Shanghai, saying China needs to stop unfair treatment of U.S. firms with operations in China.

South Korean semiconductor companies Samsung and SK Hynix received assurances from the Commerce Department that they will continue to be allowed to supply certain chipmaking tools to their China-based factories, continuing authorizations they had received as part of Commerce’s Oct. 7 China-related chip export controls rule, Reuters reported Oct. 9.

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The Biden administration needs to soon update its China-related chip export controls and apply “full blocking sanctions” to Huawei and China’s Semiconductor Manufacturing International Corp., top House Republicans recently said in a letter to National Security Adviser Jake Sullivan. Those measures and others will address what the lawmakers said has been a ”failure” by the administration and the Bureau of Industry and Security to properly enforce the Oct. 7 chip restrictions, which placed new license requirements on a host of chip-related exports and activities involving China.

U.S. sanctions and export controls have so far “not been sufficient to deter” China’s Semiconductor Manufacturing International Corp., China analysts James Mulvenon and Joseph McReynolds said in a report released this month on Mulvenon’s website. The report said Applied Materials, Lam Research, Tokyo Electron, KLA and other chip companies are “effectively selling a wide range of relevant tools” used for 28 nanometer use to China, but SMIC likely is using them for 7 nm production.

Huawei’s 7 nanometer chip smartphone breakthrough earlier this year (see 2309120005, 2309150020 and 2309190052) signals that although China hasn’t yet reached the “global state of the art for semiconductor manufacturing,” the “gap between the peak technological level of China and that of the rest of the world has shrunk” despite U.S. export controls, said Gregory Allen of the Center for Strategic and International Studies.

If the Treasury Department doesn't clarify the due-diligence steps that will be required of dealmakers under the agency’s upcoming outbound investment prohibitions, the Biden administration risks chilling a broad range of U.S ventures in China and incentivizing foreign companies to seek funds elsewhere, law firms and industry associations said in comments to the agency.

The Bureau of Industry and Security added 49 entities, mostly from China, to the Entity List for shipping microelectronics to Russian consignees connected to the country’s defense sector. The entities are semiconductor companies, technology businesses, logistics companies and others, and also include companies based in Estonia, Finland, Germany, India, Turkey, the United Arab Emirates and the U.K.

A large group of House members, including some of the most powerful Republicans in the chamber, are asking the U.S. trade representative to tell the EU to designate the U.S. as a "low-risk" country under its new deforestation-free regulation. Exporters of wood products must be in compliance with the law beginning Jan. 1, 2025.