The Treasury Department published in the July 5 Federal Register its proposed rule, unveiled in June, that could introduce new prohibitions and notification requirements on U.S. outbound investments in China’s semiconductor, quantum and artificial intelligence sectors (see 2405080039). Public comments on the rule are due Aug. 4.

The Committee on Foreign Investment in the U.S. has approved Japanese computing chip manufacturer Renesas Electronics Corp.'s acquisition of U.S.-based electronics design firm Altium Ltd., the two companies announced July 1. The CFIUS action was the last regulatory authorization needed to complete the $5.9 billion sale, the companies said. The transaction, unveiled in February, is expected to close Aug. 1 after receiving Altium shareholder approval July 12.

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The Bureau of Industry and Security denied, revoked or didn't take action on about one-third of all license applications involving Chinese companies on the Entity List between 2018 and 2023, according to a snapshot of licensing data released by BIS July 2.

Commerce Secretary Gina Raimondo and South Korean Minister of Trade, Industry, and Energy (MOTIE) Ahn Duk-geun convened last week for the second meeting of the U.S.-Korea Supply Chain and Commercial Dialogue Ministerial, where the two leaders discussed dual-use export controls, cooperation on semiconductor production and various supply chain resilience issues. The two leaders acknowledged the need to “protect our critical and emerging technologies from countries that may misuse them to undermine peace and security,” and agreed to continue “existing cooperation under the Dual-Use Export Controls working group to address national security threats while minimizing supply chain disruption.” The meeting was held one day after leaders from the U.S., South Korea and Japan met to discuss various trade issues, including export controls (see 2406270011).

Although Huawei has been able to overcome strict U.S. export controls to design advanced, high-performing chips in recent years (see 2403070059, 2309190052 and 2309120005), a report this month from Georgetown University's Center for Security and Emerging Technology suggests that Huawei’s chip performance increase is “smaller than advertised” and the company still faces significant production limits.

While the U.S. and the EU are increasingly aligning their views on China, the two sides still don’t yet fully agree on how to use export controls, investment restrictions and other economic security tools to respond to economic and national security threats posed by Beijing, panelists during a Center for a New American Security event said last week. They also said they expect challenges facing American businesses in China to continue to grow, particularly if the U.S. pursues more trade restrictions and as Beijing builds out its anti-foreign sanctions laws.

Senior trade officials from the U.S., Japan and South Korea, during a meeting this week, discussed the importance of using export controls to stop foreign adversaries from acquiring their countries’ sensitive technologies, including semiconductors, clean energy technology and artificial intelligence. A readout of the meeting -- held with U.S. Commerce Secretary Gina Raimondo, Japanese Minister of Economy, Trade and Industry Saito Ken, and Korean Minister of Trade, Industry and Energy Ahn Duk-geun -- said the countries want to “deepen our coordination of export controls on advanced technologies” and take other actions to improve the security of their supply chains.

Senior U.S. sanctions and export control officials recently warned a group of American CEOs to do more due diligence on their semiconductor shipments, telling them Chinese suppliers are frequently sending their products to Russia.

Russia has been able to sustain its war effort against Ukraine because of its ability to evade Western export controls on key military parts and semiconductors, said Maria Snegovaya, a senior fellow with the Europe, Russia and Eurasia Program at the Center for Strategic and International Studies. She said Russia is importing large amounts of controlled items from China and continuing to indirectly buy from Eastern European nations like Turkey through transshipment tactics and shell companies.