U.S.-based chip-tech group moving to Switzerland over
trade curb fears
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[November 25, 2019] By
Stephen Nellis and Alexandra Alper
SAN FRANCISCO/WASHINGTON (Reuters) - A
U.S.-based foundation overseeing promising semiconductor technology
developed with Pentagon support will soon move to Switzerland after
several of the group's foreign members raised concerns about potential
U.S. trade curbs.
The nonprofit RISC-V Foundation (pronounced risk-five) wants to ensure
that universities, governments and companies outside the United States
can help develop its open-source technology, its Chief Executive Calista
Redmond said in an interview with Reuters.
She said the foundation's global collaboration has faced no restrictions
to date but members are "concerned about possible geopolitical
disruption."
"From around the world, we've heard that 'If the incorporation was not
in the U.S., we would be a lot more comfortable'," she said. Redmond
said the foundation's board of directors approved the move unanimously
but declined to disclose which members prompted it.
Created in 2015, the RISC-V Foundation sets standards for the core chip
architecture and controls who can use the RISC-V trademark on products,
as other organizations do for Wi-Fi and Bluetooth chips. It does not own
or control the technology.
More than 325 companies or other entities pay to be members, including
U.S. and European chip suppliers such as Qualcomm Inc and NXP
Semiconductors, as well as China's Alibaba Group Holding Ltd and Huawei
Technologies Co Ltd [HWT.UL].
The foundation's move from Delaware to Switzerland may foreshadow
further technology flight because of U.S. restrictions on dealing with
some Chinese technology companies, said William Reinsch, who was
undersecretary of commerce for export administration in the Clinton
administration.
"There is a message for the government. The message is, if you clamp
down on things too tightly this is what is going to happen. In a global
supply chain world, companies have choices, and one choice is to go
overseas," he said.
In a statement to Reuters, the U.S. Department of Commerce said its
controls were designed to safeguard U.S. national security and to
"ensure bad actors cannot acquire technology that harms U.S. citizens or
interests, while promoting innovation to fuel continued American
technological leadership." The department said it meets regularly with
private industry to gauge market conditions and the effects of its
regulations.
Some Republican U.S. lawmakers said they are concerned the United States
will lose influence over RISC-V chip architecture, which can be used to
make microprocessors for almost every type of electronic device, making
it a crucial building block of a modern economy. The technology came
from labs at the University of California, Berkeley, and later benefited
from funding by the Pentagon's Defense Advanced Research Projects Agency
(DARPA).
The lawmakers warn that the foundation's Chinese members could influence
the technology's development to help China's semiconductor industry.
"The Chinese Communist Party is trying to circumvent our export control
system to support national security threats like Huawei - we cannot let
it succeed," Representative Mike Gallagher, a Republican from Wisconsin,
told Reuters.
Arkansas Republican Senator Tom Cotton said moving the foundation to
ensure it could retain Chinese members was "short-sighted at best." He
added that "if American public funds were used to develop the
technology, it’s also completely outrageous."
Redmond said in follow-up emails after speaking to Reuters that given
the technology is open source and available to anyone, she does not see
how the move could be against the U.S. national interest.
A DARPA spokesman told Reuters the agency intended for RISC-V work it
funded to be publicly available to companies and academics around the
world.
Morgan Reed, president of The App Association, which represents major
U.S. technology firms such as Apple Inc and Microsoft Corp in
Washington, likened the RISC-V Foundation's work to efforts between U.S.
and Chinese companies to jointly develop Wi-Fi chip standards.
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Technology on display at Huawei's headquarters in Shenzhen,
Guangdong province, China May 29, 2019. REUTERS/Jason Lee
"The notion that China can be barred from participating in standards alongside
the U.S. and the EU is simply not viable," Reed said. "China is too important as
a manufacturer and an end-market to ignore."
INSURANCE POLICY
The RISC-V Foundation announced at a meeting last December it would seek a
"neutral" country before making a formal decision to go to Switzerland earlier
this year, a decision that got little public attention. Final approvals in
Switzerland for the move are expected as soon as the end of November, Redmond
said.
Chinese companies have had access to the RISC-V architecture, which is publicly
available, since its creation, Redmond said.
Alibaba claimed in July it had developed the fastest RISC-V processor to date.
The company declined to comment for this story.
The RISC-V Foundation's move shows how U.S.-China trade tensions could make the
United States a harder place to host technology standards groups, according to
two attorneys who represent such groups.
The lawyers said it is unclear whether standards groups are allowed to work with
Huawei. These groups are concerned U.S. authorities may decide that some
closed-door technical discussions involve the transfer of sensitive technology
to the Chinese or others on banned lists, said one of the attorneys, Brad
Biddle, who works for several standards groups.
In June, more than two dozen standards groups - including those overseeing SD
memory cards and Ethernet and HDMI cables - wrote a letter to U.S. Commerce
Secretary Wilbur Ross asking for clarification of the rules on working with
Huawei.
The groups warned Ross that the Huawei restrictions posed a "serious risk" that
standards work could move out of the United States, which could end a long-held
trend where U.S.-based groups set de facto standards for the rest of the world,
they wrote.
The Commerce Department published an advisory opinion seeking to clarify the
issue in August, but standards lawyers said the rules remain confusing.
The RISC-V Foundation's Redmond does not yet see a "credible threat" to
international collaboration. "But we're taking out an insurance policy against
that type of action by moving our incorporation," she told Reuters.
HUAWEI SUPPORTS MOVE
The board's seven current members are all based in North America. After the
move, the foundation's board will be expanded and European and Asian members
will be added, said Redmond. Reuters could not confirm whether any Chinese
companies planned to join the board.
Andrew Updegrove, an attorney who does work for standards groups, said that U.S.
restrictions on transferring U.S.-origin technology to Chinese companies will
still apply regardless of where the RISC-V Foundation is headquartered.
At Netherlands-based NXP Semiconductors, which is a member of the foundation,
customers have asked the company to detail where the technology in its chips
comes from, said Lars Reger, its chief technology officer. The customers do not
want to be cut off in future trade disputes, he said.
U.S. officials and some lawmakers have alleged Huawei's telecom equipment may
enable surveillance by China. The resulting backlash has prevented it from
making inroads into the U.S. market. Huawei has denied the claims.
In response to Reuters questions, a Huawei spokesman said: "We support RISC-V
Foundation identifying Switzerland as a neutral venue for open source
development. Making open source as open as possible is important for the
industry."
He said that RISC-V "might fit well into Huawei's vision of this heterogeneous,
open world."
(Reporting by Stephen Nellis in San Francisco and Alexandra Alper in Washington;
Additional reporting by David Shepardson; Editing by Martin Howell and Bill
Rigby)
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