Export Controls on Chipmaking Tools Should Be Tightened, House Panels Hear
The U.S. should work with its allies to increase export restrictions on semiconductor manufacturing equipment (SME), components and services to limit China’s ability to make computing chips, former government officials told lawmakers Nov. 20.
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Dean Ball, former senior policy adviser for AI and emerging technology at the White House Office of Science and Technology Policy, said that many SME tools that U.S. firms are barred from exporting to China can be sold to China by their competitors in allied countries. “This is the worst of both worlds: our firms bear the cost of the policy, but the policy itself fails because our allies do not coordinate with us,” he testified at a joint hearing of two House Foreign Affairs subcommittees.
Ball, now a senior fellow at the Foundation for American Innovation, said the U.S. should urge its allies, especially Japan and the Netherlands, to match American export controls on SME. If diplomacy fails, he believes, the U.S. should invoke the foreign direct product rule on U.S.-origin technology used in those tools.
Ball said that President Donald Trump’s success in 2019 in persuading the Dutch government to block sales of extreme ultraviolet lithography (EUV) machines to Chinese semiconductor companies is “the single most important technological chokepoint preventing China from manufacturing leading-edge semiconductors.”
Ball also said the U.S. and its allies should increase export controls on “highly specialized” components that China can use to assemble advanced SME on its own. Even some parts for EUV machines, which Rep. Bill Huizenga, R-Mich., called the “most advanced chipmaking tool in the world,” can be sold to China by U.S. and allied country firms.
Ball also said the U.S. should consider restricting China’s access to equipment that makes legacy chips, not just advanced chips. If China were to gain control of legacy chip production, he believes it could gain leverage over the rest of the world.
Chris McGuire, former deputy senior director for technology and national security at the National Security Council, said the U.S. also should push allies to increase export restrictions on maintenance support for SME, especially lithography tools. McGuire, who is now senior fellow for China and emerging technologies at the Council on Foreign Relations, said the lithography tools China already has will likely break down and become degraded if maintenance is no longer provided.
"The United States has restricted U.S. companies from providing that on-site servicing at advanced Chinese fabs. The Dutch have not done that for [Netherlands-based] ASML, or they have in very limited ways," McGuire said. "This is a key gap that we need to close."
Kevin Wolf, former assistant secretary of commerce for export administration at the Bureau of Industry and Security, said the U.S. would need to convince its allies that increased SME restrictions would enhance their national security. Those countries tend to be reluctant to restrict exports unless there is a clear connection to weapons, said Wolf, now an international trade partner at the Akin law firm.
Huizenga recently introduced a bill to promote multilateral coordination on export controls for chipmaking equipment (see 2511200003).
Del. James Moylan, R-Guam, revealed that he plans to propose legislation to require the Commerce Department to annually assess China's AI ecosystem, including chip design and fabrication tools and AI model development. He said his China AI Power Report Act would help pinpoint loopholes in export controls.