The U.S. and Japan plan to set up a working group on securing supply chains for strategic technologies, including semiconductors, Nikkei Asia said in a report April 1. The two sides will likely agree to terms on the project -- including cooperation on research and development and production of strategic technology components -- when Japanese Prime Minister Yoshihide Suga and President Joe Biden meet in Washington later this month, the report said. Both countries hope to address a global shortage of semiconductors and want to create a system where production doesn’t rely on specific regions that may present geopolitical risks, such as Taiwan and China, the report in Nikkei Asia said. The working group will reportedly include representatives from Japan’s trade and national security agencies and the U.S. National Security Council and the Commerce Department.

A Japanese trade official said Japan's subsidies to diversify and reshore supply chains have already spurred plans for domestic factories for semiconductors, battery components for electric vehicles, aircraft engine parts, household disinfectants, medicines, protective gowns and chemicals.

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The Bureau of Industry and Security will hold a virtual forum April 8 to present ways the agency can help boost the competitiveness and capacity of the U.S. semiconductor industry, BIS said in a notice released March 26. The agency earlier this month requested written comments on semiconductor supply chain issues (see 2103110047) but said the forum will give commenters a chance to provide “oral remarks.” Comments will help inform the Commerce Department’s report to the White House as part of a February executive order to address supply chain shortages of semiconductor chips (see 2102240068), BIS said. Officials from BIS and other agencies will participate in the 2 p.m. to 5 p.m. EDT forum. Registration closes 5 p.m. April 1.

Three Sheppard Mullin lawyers, across two continents, say the outcome of the new aggressive stance against China's rising technological manufacturing sector is yet to be seen, but that they don't expect the Biden administration to back away from the most significant export control actions taken under President Donald Trump.

Intel will invest $20 billion to build two new semiconductor fabs in Arizona in a bid to become a “major provider of foundry capacity” in the U.S. and Europe, the company said March 23. It plans to use its expanded foundry capacity to “serve the incredible global demand for semiconductor manufacturing” and to partner with IBM to better research and develop next-generation packaging technologies.

The U.S. should be doing more to restrict Chinese semiconductor companies from buying U.S. equipment, which is strengthening China’s military and ceding U.S. technology leadership, researchers said. Although the U.S. should bolster domestic policies to help the semiconductor industry -- including through supply chain, manufacturing and research incentives (see 2102240052) -- the researchers said the Commerce Department’s export controls include loopholes for companies that sell advanced technologies to China.

Commerce Department Secretary Gina Raimonndo said she had a “productive” meeting with the Semiconductor Industry Association last week and agreed that the U.S. should push for “strong investments” in domestic semiconductor manufacturing and innovation. “Semiconductors are America’s fourth largest export, and critical to our economic competitiveness and national security,” Raimondo said in a March 19 statement, adding that the meeting with SIA’s board of directors is the beginning of an “ongoing dialogue” between Commerce and industry leaders. “[O]ver the years we have underinvested in production and hurt our innovative edge, while other countries have learned from our example and increased their investments in the industry,” Raimondo said. “As Secretary of Commerce, combatting the semiconductor shortage and investing in American manufacturing of semiconductor technology is going to be a priority of mine.”

The Commerce Department should expand export restrictions on China’s top chipmaker to prevent it from accessing a broader range of semiconductor manufacturing equipment, two U.S. lawmakers said. In a March 18 letter to Commerce Secretary Gina Raimondo, Sen. Marco Rubio, R-Fla., and Rep. Michael McCaul, R-Texas, asked the agency to apply the foreign direct product rule to China’s Semiconductor Manufacturing International Corporation, which would restrict the company’s ability to import certain foreign-made semiconductor equipment that is built with or that incorporates U.S. technology. The move would subject SMIC to similar restrictions imposed by the Bureau of Industry and Security on other Chinese companies on the Entity List, including Huawei (see 2012210044).

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