British semiconductor company Arm, in its initial U.S. public offering this week, said it’s facing uncertainty from U.S. and U.K. export controls and doesn’t expect to receive an export license to ship certain high performance processor cores to China. The company also said it’s expecting to see slower growth in its China sales revenue due to several factors, including various government-imposed “trade and national security policies.”
The Commerce Department is giving a selection committee more time to choose the board members for a National Semiconductor Technology Center (see 2304250032), a key piece of the Chips Act designed to bring together the government, national labs, chip companies, suppliers, academia, investors and others to collaborate on semiconductor matters. Commerce announced members of the selection committee in June and planned for the committee to “automatically terminate” by Aug. 31, but the agency said this week the committee “would benefit from additional time to complete this important task.” The termination date will now be Sept. 30.
Republicans last week urged the Biden administration against meeting with Beijing to discuss semiconductor export controls, saying the U.S. should not negotiate its policies with China and should instead enact tougher restrictions. They specifically asked Commerce Secretary Gina Raimondo, who is considering a trip to China, to pledge that the U.S. plans to increase its export restrictions against the country.
China is planning “countermeasures” to respond to the Biden administration's recent executive order on outbound investment, a Chinese Ministry of Commerce spokesperson told reporters this week. The spokesperson said China has “serious concerns” about the restrictions -- which will eventually lead to prohibitions and notification requirements for U.S. investment in three advanced technology sectors in China -- and said the U.S. is “harming others and harming itself.”
New Indian import restrictions on computers and other electronics could “significantly disrupt” trade, including U.S. exports, eight industry groups wrote in a letter this week to U.S. Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo. The groups -- representing the American semiconductor, electronics, manufacturing and retail industries -- asked the Biden administration to raise the issue with the Indian government “as a matter of urgency.”
China’s recently imposed export controls on gallium and germanium (see 2307050018) -- two metals used to produce semiconductors -- were for legitimate national security reasons, Beijing said this week, rebuking comments from U.S. officials and lawmakers who have said the restrictions have no justification (see 2307060053). In an Aug. 9 post on Chinese social media site Weixin, the National Security Ministry said the country's national security concerns stem from an incident in 2009, when an employee working for a global mining company in China tried to access “detailed technical analysis of dozens of Chinese iron and steel enterprises and accurate parameters of each production process.”
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China is not convinced that the U.S. is only trying to derisk, not decouple, from China’s economy, said Ryan Hass, a former National Security Council official. He said Beijing is wary of the growing number of U.S. sanctions and trade restrictions and doesn’t believe the Biden administration is acting in “good faith,” which risks further worsening tensions.
The U.S. may run into challenges enforcing aspects of its new outbound investment restrictions on China, especially for intercompany transfers and investments, Sarah Bauerle Danzman, a former State Department official, said during a webinar hosted by the Center for a New American Security last week. She said investors will likely need more guidance on the issue whenever the Treasury Department releases regulations for the regime.
The Bureau of Industry and Security last week expanded the scope of its nuclear-related export controls on China and Macau, saying the change was necessary to impose tighter license requirements on items that could “contribute to nuclear activities of concern.” The Nuclear Regulatory Commission also suspended a general license that had authorized exports of certain nuclear items for nuclear end uses in China.