The Biden administration, along with allied countries, announced new export control measures for key technologies, including quantum computing and semiconductor products, on Friday, September 6th. These measures are aimed at addressing national security threats posed by China, Iran, Russia, and others.
The U.S. Department of Commerce, through the Bureau of Industry and Security (BIS), issued an Interim Final Rule (IFR) that imposes controls on critical and emerging technologies that have been the subject of extensive technical agreements with international partners. This includes quantum computers and components, advanced semiconductor manufacturing tools, certain components and software related to metals and metal alloys, and key components for artificial intelligence applications such as high-frequency bandwidth chips.
The Department of Commerce stated that these actions were taken for “national security and foreign policy reasons,” emphasizing that they were the result of extensive discussions with international partners.
“This action today strengthens our international relationships with like-minded countries and ensures that U.S. export controls remain aligned with rapidly evolving technologies that, if acquired by malicious actors, pose a serious threat to our national security,” BIS said in a press release.
Several countries, including the UK, have already implemented similar controls, with others expected to follow suit. On the same day, the Netherlands also announced an expansion of export controls on ASML chip manufacturing equipment.
These control measures align with the Biden administration’s series of initiatives to restrict Beijing’s advancement in quantum technology and high-end chip sectors.
The Chinese Ministry of Foreign Affairs on Friday accused the U.S. of “violating” market principles and “disrupting” global supply chains.
These rules take effect immediately, but the public still has a 60-day comment period.
Under the latest control measures, export licenses will be required for projects involving quantum computing, advanced semiconductor manufacturing equipment, Gate-all-Around Field-Effect Transistor (GAAFET) technology, and Additive Manufacturing (AM) projects used for producing metal or metal alloy components.
Quantum computing is seen as a groundbreaking technology that Beijing considers a strategic priority. According to a 2022 Rand Corporation assessment, the U.S. is currently a global leader in most quantum technologies, positioning itself at or near the forefront in every application area.
GAAFET technology, as reported by Nikkei, is used to develop high-performance chips suitable for supercomputers, with GlobalFoundries and Samsung already incorporating GAAFET structures in their semiconductor production processes.
These restrictions not only cover equipment but also include certain consumables and components designed for advanced chip manufacturing, such as extreme ultraviolet (EUV) lithography masks used to block light during the process of “printing” transistor patterns onto wafers.
The U.S. has long been combating efforts by China and other adversaries to acquire advanced technological capabilities necessary for artificial intelligence, aiming to prevent the misuse of advanced chips and components in military developments.
The latest measures build upon previous restrictions primarily targeting China, including comprehensive expansions of these constraints in 2022. These regulations prohibit U.S. companies from supplying certain grades of advanced chip equipment to any Chinese customers without licenses, while also restricting Americans (citizens, residents, and certain entities) from providing support for chip development or production facilities in China.
The new rules add 18 Export Control Classification Numbers (ECCNs) to the Commerce Control List and update nine existing ECCNs. This aligns the U.S. with other countries in restricting the flow of equipment to nations like Russia and Iran.
For instance, the newly added ECCN B910 specifically addresses equipment related to alloy manufacturing, critical for producing components for missiles, aircraft, and propulsion systems. Another new ECCN is 3A904 for low-temperature cooling systems and components focusing on items related to “a large number of physical quantum bits for quantum system research.”
Essentially, exporting certain types of items from the U.S. now requires authorization if they are listed on or added to the Commerce Control List, enabling the U.S. to restrict the sale of certain technologies to specific countries like China, Russia, and Iran.
In order to enhance international cooperation, the new rules also include a license exception framework for friendly countries. The Department of Commerce stated in a press release that while these rules cover global exports, they provide waivers for countries implementing similar measures, including allies like Japan and the Netherlands, with more countries expected to follow suit.
The Bureau of Industry and Security Assistant Secretary of Commerce, Thea D. Rozman Kendler, stated in a release, “Through this rule, we have not only made new emerging technology control measures, but also enhanced the flexibility of our system by offering new license exceptions to trusted partners.”
Under this arrangement, relevant foreign entities will not need to submit export license applications for specific projects.
On Thursday, ASML, a chip equipment company from the Netherlands, indicated that it can now apply to the Dutch government for approval to ship certain machines without having to seek permission from the U.S.
According to Bloomberg, due to the U.S.’s leadership in several academic and research partnerships, the broader commitment to more lenient license approvals provides momentum for countries to align with the U.S. in countering China.
Taiwan’s Minister of Economic Affairs stated that Taiwan would take the U.S. as a reference.
“We respect global norms,” Minister of Economic Affairs Guo Zhihui told reporters. “Taiwan cannot deviate from norms set by friendly countries. I think we should follow suit.”
A report from the Congressional Research Service in 2023 emphasized the importance of coordinating export controls with other governments to ensure the effectiveness of such efforts in preventing foreign access to certain goods or technologies.
The report noted, “Coordination may be critical to the effectiveness of policies aimed at preventing or delaying foreign access to specific commodities or technologies. If these commodities or technologies are readily available from foreign sources, controls may be less effective.”
For example, in 2019, the U.S. attempted to restrict Huawei and its 114 subsidiaries by adding them to the Entity List to limit the technology Huawei could access. However, due to a lack of international partners’ coordination, the effectiveness of this action was subpar. Consequently, BIS expanded the scope of sanctions in 2020, broadening efforts to counter Huawei and its partners to compensate for insufficient international support.
In 2023, the U.S., Japan, and the Netherlands, three major chip manufacturing nations, reached an agreement to coordinate efforts to prevent China from accessing advanced chip technology. The latest BIS export controls are a further testament to international cooperation.
The Dutch government stated on Friday that it would expand export permit requirements for some of ASML’s chip manufacturing equipment to align with U.S. policy.
Reuters reported that the machines covered by the new Dutch regulations are ASML’s 1970i and 1980i DUV (Deep Ultraviolet) immersion lithography tools, situated in the middle tier of its product line.
In September 2023, the Dutch government began requiring export permits for ASML’s NXT:2000 series and superior DUV tools, while it has never allowed shipments to Chinese customers for the company’s most advanced EUV (Extreme Ultraviolet) lithography tools.
A report from the Center for Strategic and International Studies (CSIS) in February 2024 highlighted the importance of coordinating U.S. restrictions with those of major allies, emphasizing that the success of U.S. controls depends on aligning them with allied restrictions to prevent discrepancies in export controls.
According to the UK technology website The Register, a study titled “Consequences of Target Country Export Controls” by scholars from Fudan University and Harvard Business School found that export controls were effective in restricting controlled goods from sanctioned Chinese companies under the “China Rule” policy imposed by the U.S. in 2007.
Alan Estevez, Deputy Secretary of Commerce responsible for BIS, stated in a release, “The coordination of controls on quantum and other advanced technologies makes it increasingly difficult for our adversaries to develop and deploy technologies that threaten our collective security.”
Chinese quantum experts and the Chinese government project that China lags behind the U.S. in numerous quantum areas but aim to surpass the country by the mid-2020s. However, China is unlikely to surpass the U.S. and Europe as leaders in foundational research and development based on current trajectories.
Starting in 2022, the Biden administration began prohibiting U.S. companies from selling high-end chips for supercomputers, artificial intelligence, and data centers to China.
Chinese Foreign Ministry spokesperson Ma Ning labeled U.S. actions as “politicizing” trade and technology issues and using them as “weapons.”
As the U.S. tightens restrictions and technology sanctions, Beijing is ramping up investments in critical technologies, but the chip manufacturing industry still lags far behind leading industry players.