Lawmakers Urge US to Further Tighten Restrictions on Chinese Chipmaker SMIC

 Two key Republican lawmakers on Tuesday urged the Trump administration to strengthen new rules adopted Friday aimed at preventing China's biggest chipmaker SMIC from getting access to advanced US technology.

Senator Marco Rubio and Representative Michael McCaul said the Entity List designation by the US Commerce Department was not strict enough and should be rewritten to close "dangerous loopholes that would allow nearly all sales to SMIC to continue without restriction and support the (Chinese Communist Party's) stated goal of military preeminence." The letter said they were concerned that without changes the rules would be "utterly ineffective in addressing this growing national security threat."

The Commerce Department declined to comment, but Commerce Secretary Wilbur Ross said Friday the designation was a "necessary measure to ensure that China, through its national champion SMIC, is not able to leverage US technologies to enable indigenous advanced technology levels to support its destabilising military activities."

The lawmakers are concerned because the restrictions apply only to technology "uniquely" required to produce semiconductors at 10 nanometres and below. The administration "seems to be allowing SMIC access to nearly all semiconductor manufacturing equipment," they wrote.

The lawmakers said they were concerned the new rules were "done for show and parochial commercial interests at the expense of US national security."

SMIC said Sunday that being put on a US trade blacklist would pose a significant adverse impact to its research and development in its 10-nanometre and more advanced chip technology, but said it did not expect the US decision to have a major negative impact on its short-term operations and finances.

© Thomson Reuters 2020

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