The Commerce Department’s increased restrictions on exports to Huawei (see 2008170029) will cause “significant disruption” to the U.S. semiconductor industry, the Semiconductor Industry association said Aug. 17. Although SIA is “still reviewing the rule,” CEO John Neuffer called the restrictions “broad” and said they significantly expanded on changes made to the foreign direct product rule in May (see 2005150058). “We are surprised and concerned by the administration’s sudden shift from its prior support of a more narrow approach intended to achieve stated national security goals while limiting harm to U.S. companies,” Neuffer said. “We reiterate our view that sales of non-sensitive, commercial products to China drive semiconductor research and innovation here in the U.S., which is critical to America’s economic strength and national security.” Commerce did not comment.

The Bureau of Industry and Security on Aug. 17 added 38 Huawei affiliates to the Entity List and refined a May amendment to its foreign direct product rule, further restricting Huawei’s access to U.S. technology, the agency said in an Aug. 17 final rule. BIS also modified four existing Huawei entries on the Entity List, amended language in the Export Administration Regulations and said it will continue one cybersecurity-related authorization under its temporary general license for Huawei. The remainder of the license expired Aug. 13.

Taiwan wants to begin negotiations on a free trade deal with the U.S., Taiwan President Tsai Ing-wen said Aug. 12, in a speech for think tanks the Hudson Institute and the Center for American Progress. The president said a trade deal with the U.S. is among her priorities during her second term, saying it will help increase Taiwan’s supply chain security.

Huawei plans to stop production of its flagship Kirin chipsets next month due to pressure from U.S. export restrictions and license requirements, Reuters reported Aug. 8, citing financial magazine Caixin. Reuters quoted by way of Caixin coverage of an industry event, Richard Yu, CEO of Huawei’s customer business unit, who said U.S. restrictions have made it “impossible” to keep developing the chipsets, which are used in mobile phones. “From Sept. 15 onward, our flagship Kirin processors cannot be produced,” Yu said while speaking at the recent event in Shenzen, China. “Our [artificial intelligence]-powered chips also cannot be processed. This is a huge loss for us.” Huawei did not comment.

Amina Mohamed, Kenya's Sports, Culture and Heritage minister and its nominee to lead the World Trade Organization, said strengthening rules on industrial subsidies and reforming the Appellate Body are critical for the WTO's continued success.

The U.S. needs to pour more resources into research and innovation of emerging technologies to boost commercialization and outpace Chinese technology development, Sen. Marsha Blackburn, R-Tenn., said. Blackburn advocated for a methodical decoupling from China, saying the U.S. needs to reshore manufacturing of critical technologies to help U.S. industries be more competitive in foreign markets.

The Congressional Research Service issued a report Aug. 4 on emerging military technologies, including supply chain risks faced by the U.S. and considerations for Congress. The CRS suggests the U.S. supply chain for advanced military technologies may be compromised by Chinese industrial espionage or attempts to steal intellectual property relating to hypersonics. The report also cites the National Security Commission on Artificial Intelligence finding that the U.S. “lacks domestic facilities” to produce components needed to make artificial intelligence technologies, forcing the nation to rely on “foreign fabrication and complex global supply chains for production.” The report cites experts who say technology developments are likely to “outpace” U.S regulation, adding that the U.S. should consider “broad” engagement with allies to “advance collaboration on emerging technologies, norms, and standards setting.”

Export Compliance Daily is providing readers with some of the top stories for July 27-31 in case you missed them.

The Bureau of Industry and Security will hold a virtual export control policy conference Sept. 2, covering updates on export control regulations, license exceptions, semiconductor controls and the Entity List. The conference will include a question-and-answer session with BIS officials and “other agency experts,” and will feature updates from the State Department’s Directorate of Defense Trade Controls, sanctions policy and the Committee on Foreign Investment in the U.S. BIS canceled its in-person annual conference earlier this year due to the COVID-19 pandemic (see 2005210051).

The U.S. should impose stricter export controls on advanced semiconductor manufacturing equipment to prevent China from indigenizing semiconductor technologies, technology policy experts said. If the U.S. and allies successfully block China from importing and developing specialized software and advanced chips, they should then impose end-use and end-user controls to allow shipments only for civilian uses in China, the experts said.