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Chips Chatter: March 14-April 3, 2023
Thursday, April 6, 2023

Multilateral Chips Export Controls – Friendshoring, Friendshoring, and Friendshoring

  1. North American Chips Corridor: On March 24, the White House announced several commitments between the U.S. and Canada to bolster the North American chips corridor, including an agreement between Canada and a U.S. technology company to incentivize developing packaging and testing capabilities; a US commitment of $50 million of Defense Production Act (DPA) funding for U.S. and Canadian companies to strengthen advanced packaging of semiconductors and printed circuit boards (PCBs); and a Canadian commitment of CAD $250 million for semiconductor projects.

  2. Update—US-Netherlands-Japan Deal: On March 31, Japan’s government said it plans to restrict exports of 23 types of semiconductor manufacturing equipment, aligning its technology trade controls with a U.S. push to curb China’s ability to make advanced chips.

Export Controls & Disruptive Technology Strike Force

  1. During a recent Regulations and Procedures Technical Advisory Committee meeting, John Sonderman, Director of the Bureau of Industry and Security (BIS) Office of Export Enforcement stated that the agency hopes its new Disruptive Technology Strike Force leads to more investigations of export control violations, faster prosecutions, and more criminal enforcement actions.

  2. What’s next?  Harmonizing controls with EU: Charles Wall, BIS senior policy advisor for the US-EU Trade and Technology Council, confirmed the agency will soon request feedback from industry, academia, and others on key differences in US and EU interpretations of export control provisions. Wall added that the notice will ask for “very specific information” on discrepancies between the two territories’ export control regimes and ways those rules can be harmonized.

What We’re Tracking – CHIPS Incentives Program

  1. Department of State on International Technology Security and Innovation (ITSI) Fund: On March 14, the U.S. Department of State outlined plans to implement the CHIPS Act International Technology Security and Innovation (ITSI) Fund. The ITSI Fund provides the State Department with $500 million ($100 million per year over five years, starting in Fiscal Year 2023) to provide for semiconductor supply chain security and international information and communications technology (ICT) security.

    • What Blinken said: During a Senate Foreign Affairs hearing held on March 22, when asked to outline and describe the strategic impact of the ITSI Fund. Secretary Blinken said the fund would allow the U.S. to shore up its semiconductor supply chain and make sure the telecommunication network only relies on trusted vendors.

  2. Department of Commerce on national security guardrails: On March 21, the U.S. Department of Commerce released a Notice of Proposed Rulemaking (NPRM) for the national security guardrails included in the CHIPS Incentives Program. The proposed rules lay out the following: (1) restriction of expansion of advanced facilities in foreign countries of concern; (2) limits of expansion of legacy facilities in foreign countries of concern; (3) classifying semiconductors as critical to national security; and (4) restrictions on joint research and technology licensing with foreign entities of concern.

  3. Department of Treasury on CHIPS investment credits. On March 21, the U.S. Treasury Department released an NPRM, which details the Advanced Manufacturing Investment Credit (CHIPS ITC) administered by the Internal Revenue Service (IRS).

In Case You Missed It

  1. On March 16, at an event hosted by Taiwan’s CommonWealth Magazine in Taipei, Taiwan Semiconductor Manufacturing Co. (TSMC) founder Morris Chang declared that globalization for the chip industry is over and expressed support for U.S. efforts to slow down China’s progress through export curbs and company sanctions.

  2. On March 31, the Cyberspace Administration of China (CAC), China’s top internet regulator, censor, oversight and control agency,launched a cybersecurity review into U.S. memory chip maker Micron Technology.

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