Page:Marco Rubio' Letter to Commerce, RE Semiconductor Export Controls.pdf/1

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The Honorable Gina Raimondo Secretary U.S. Department of Commerce 1401 Constitution Avenue NW Washington, D.C. 20230

Dear Secretary Raimondo:

I write to inquire about the status and progress of the Bureau of Industry and Security’s (BIS) interim final rule, effective October 7, 2022, which imposes additional export controls on the transfer of certain semiconductors and semiconductor manufacturing equipment to China. As you know, the Chinese Communist Party (CCP), in its October 2020 five-year plan, declared that developing the Chinese semiconductor industry is a top technology priority. Micron, ASML, and other Western chip companies have all publicly disclosed thousands of Chinese attempts to steal intellectual property (IP) and technology to achieve this goal.

The BIS interim rule is a step forward. However, companies are hard at work to weaken and circumvent the rule’s export controls. Nvidia, for example, is creating downgraded versions of its products for the Chinese market to skirt the rule. While these lower-performance chips increase the time and expense for Chinese end users to perform tasks, they are still an improvement over Chinese-produced alternatives, allowing those end users to continue work in advanced fields that threaten our national security, such as Artificial Intelligence (AI). Chinese firms are reportedly bundling lower-performance chips and finding other workarounds to generate the computing power necessary for their work. Other companies, such as Korean chipmaker Samsung, have lobbied for and won special, one-year exemptions from the export controls, allowing business as usual at production facilities in China.

Industry executives believe that these export controls are an annoyance and not a longterm problem for Chinese technology champions. Chinese chipmakers have found similar ways around the rule. ChangXin Memory Technologies, for example, is proceeding with a major