Chip industry group urges Biden admin to review export controls on China

[January 26, 2021]  By Karen Freifeld

(Reuters) - A semiconductor industry group on Monday called for a review of the Trump administration's export control policy, and urged the incoming U.S. Commerce Secretary to work with allies when curbing sales of U.S. technology to China for national security.

Gina Raimondo, U.S. President-elect Joe Biden's nominee to be secretary of Commerce, speaks during an event to announce members of Biden's economics and jobs team at his transition headquarters in Wilmington, Delaware, U.S., January 8, 2021. Picture taken January 8, 2021. REUTERS/Kevin Lamarque

SEMI, which represents semiconductor equipment makers and device manufacturers worldwide, said the prior administration’s unilateral rules had made any potential benefit likely to be less effective over time, had unnecessarily hurt American industry, and had left U.S. exporters vulnerable to retaliation.

In a letter to Gina Raimondo, secretary-designate of the U.S. Commerce Department, SEMI President Ajit Manocha said the United States should coordinate with allies whose companies compete in the global market.

"Multi-lateral controls - where items of concern are controlled by all major producing nations – create a level playing field, maximize effectiveness, and minimize harm to U.S. national security and economic competitiveness," Manocha said in the letter, a copy of which was obtained by Reuters.

The Commerce Department did not immediately respond to a request for comment.

Increasingly, Manocha noted, foreign competitors are marketing goods as "free from U.S. export controls."

The letter criticizes the Trump administration for implementing rules with little public input and no clear overarching policy, and said the "highly unusual process" resulted in unintended consequences.

It urged the Commerce Secretary-designate to quickly correct an August rule that expanded U.S. authority over foreign company sales to China's Huawei, which unintentionally affected some foreign-made semiconductor production and test equipment.

It also asked the Biden administration to promptly reduce the backlog of license applications, saying delays are de facto denials.

In addition, the letter said rules that restricted sales to over 100 entities the United States linked to the Chinese military went into effect without industry comment. The tech group suggested the United States work with nations like the Netherlands, Germany, the United Kingdom, Japan and South Korea to develop common objectives for restricting semiconductor technology to China.

(Reporting by Karen Freifeld. Editing by William Maclean and Mark Potter)

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