U.S. lawmakers have introduced bipartisan legislation that aims to tighten export controls on semiconductor manufacturing equipment, citing national security and technological advantage concerns.

The Multilateral Alignment of Technology Controls on Hardware Act addresses gaps that allow China, Russia, Iran and other “countries of concern” to bypass restrictions and obtain U.S. chipmaking equipment and components, such as deep ultraviolet immersion lithography machines.

The legislation explicitly targets China’s technology firms, including Huawei and Semiconductor Manufacturing International Corp., among others. Lawmakers introduced companion bills in the House and Senate last week.

China has been able to bypass restrictions to obtain chipmaking equipment and components from the United States for military ambitions through front companies, subsidiaries or allied countries, according to the proposed MATCH Act. Lawmakers drafted the bill to update export controls so adversarial countries cannot buy chipmaking technology that they cannot build themselves.

The MATCH Act directs the Secretary of Commerce to identify all “choke point” equipment and facilities, as well as prohibit the sale or servicing of such technology within a designated country of concern. The bill also targets facilities run by Hua Hong, ChangXin Memory Technologies and Yangtze Memory Technologies Corp, cutting off foreign exports, servicing and technical support.

The legislation addresses “loopholes” that allow countries to use front companies and subsidiaries to obtain restricted U.S. exports. It also addresses multilateral gaps, where differences in controls have allowed adversaries to procure exports and services from allied countries that U.S. firms are prohibited from selling.

U.S.-based Applied Materials and GlobalFoundries have both faced fines in recent months from the Department of Commerce related to selling chips or chipmaking equipment to China.

“This bill not only strengthens our export controls regime but importantly reinforces using diplomacy to build a unified, effective approach alongside our allies and partners that safeguards these technologies and levels the competitive landscape,” bill sponsor and Sen. Andy Kim, D-N.J., said in a statement.

The MATCH Act ensures that export controls will apply uniformly for U.S. and allied countries. If allies have not moved to strengthen their controls within a 150-day timeline, the act directs the Commerce Department to implement controls unilaterally and expand U.S. jurisdiction over foreign-produced items that use U.S. software, technology or components under the Foreign Direct Product Rule.

“While continuing to control advanced chips is critical, we must also ensure that China does not gain the means to produce these technologies itself,” Kim said.

Sen. Pete Ricketts, R-Neb., also spearheaded the MATCH Act, along with co-sponsors Sen. Chuck Schumer, D-N.Y., and Sen. Jim Risch, R-Idaho. Congressman Michael Baumgartner, R-Wash., introduced a companion bill to the House of Representatives. It was co-sponsored by Rep. John Moolenaar, R-Mich., chairman of the select committee on China.

The proposed bills have received positive feedback from a number of technology and security think tanks as the race for global dominance in artificial intelligence heats up.

“Export controls on chipmaking tools have been critical to maintaining the U.S. lead in AI computing power,” according to a statement from the Institute for Progress. “By strengthening chipmaking tool controls, the MATCH Act would better preserve U.S. AI leadership over the long term.”

Shares of ASML, a Dutch semiconductor equipment maker, fell in early trading after Congress introduced its plan to restrict China exports, Reuters reported Tuesday. Customers in China represented about 30% of ASML’s sales last year, according to the company’s latest annual report. ASML reported net sales of 32.7 billion euros, or about $38.2 billion.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved