In the early morning of March 3, Beijing time, the Bureau of Industry and Security (hereinafter referred to as “BIS”) under the U.S. Department of Commerce updated the Entity List, adding 37 entities.

Among them, 28 Chinese entity enterprises, R&D institutions and individuals were included in the list, including Wave Group Co., Ltd., Fourth Paradigm Technology Co., Ltd., Godson Zhongke (688047.SH ), BGI's BGI Gene Research Institute and BGI Gene Technology (Hong Kong) Co., Ltd., National Parallel Computer Engineering Technology Research Center, Galaxy Electronics (002519.SH ), Liang Ping Huang and Luo Dingwen, etc.

BIS stated that these entities and individuals “threaten the national security of the United States.”The export, re-export, or transfer of items controlled under the (domestic) Export Administration Regulations (EAR) to entities on the above-mentioned entity list requires BIS permission, and license exceptions are not applicable; the review of license applications will be in accordance with the review policy indicated in the entity and other relevant provisions of the U.S. EAR.

In simple terms, only by obtaining authorization from the United States can the companies on the above list obtain American products and technologies.

According to data released earlier by the U.S. Department of Commerce, there are currently 639 Chinese entities on the “entity list” of U.S. export controls to China, of which more than 155 were added during the Biden administration.

 

At the same time, the U.S. Department of Commerce plans to continue to restrict investment by chip companies.On February 28th, the United States announced the US细则52.7 billion subsidy rules for chip and technology companies in the US芯片280 billion Chip and Science Act, which mentions China and requires subsidized entities to promise that within 10 years from now, they will not build new investments or expand production capacity in “foreign entities of concern” such as China (there are important trading plans for substantial semiconductor production capacity expansion, except for mature processes), and they must notify the US Department of Commerce that they have the right to withdraw subsidies; US Secretary of Commerce Gina Raimondo also said that the Biden administration is considering a pilot program. Restrict U.S. venture capital funds from investing in Chinese chip semiconductor or AI technology.She estimated that it might take several months for the United States to implement the pilot program.

As the United States continues to impose export control restrictions on China's advanced chips and AI and other high-tech products, China is increasing its “domestic substitution” efforts.

According to the Financial Times, Bill Gates, the founder of Microsoft, said on March 2: “I think the United States will never be able to successfully prevent China from possessing powerful chips. We will ‘force’ China to spend time and a lot of money to make its own chips. .”

Since the latest U.S. export control entity list involves a number of listed and key companies, on the morning of March 3, Wave Information responded to the media saying that the company is further verifying and evaluating, and there is no more information to synchronize.Wave Information's early morning bidding fell and stopped, and the amount of orders closed exceeded 1.5 billion; BGI said that the company is communicating and verifying with relevant news sources. If there is further progress later, you can pay attention to the company's official website or announcement.

The U.S. government lists 28 more Chinese entities and individuals, involving a number of listed companies
The list of entities updated by the BIS of the U.S. Department of Commerce this time has added 38 entries for 37 entities, including Belarus (1), Myanmar (3), China (28), Pakistan (4), Russia (1) and a Chinese Taiwan entity.At the same time, BIS also revised the existing entries of 10 Chinese scientific research institutions, including Beijing University of Aeronautics and Astronautics.The U.S. Department of Commerce said that the new entity list rules will take effect on March 2, 2023.

Specifically, BIS said that Suzhou Centec Communications Co., Ltd. (Suzhou Centec Communications Co., Ltd.)), Suzhou Shengke Technology Co., Ltd., Galaxy Electronics and other eight entities were included in the entity list for engaging in activities that violate the national security and foreign policy interests of the United States, involving the supply of Iran's Paradazan System Namad Arman (PASNA) that contains U.S. technology.

At the same time, BIS has also included five Chinese entities such as Baoding Giant Import and Export Co., Ltd. and Luo Dingwen in the entity list, involving the Pakistan plan, and the license application will be reviewed in accordance with EAR's 744.3(d); Beijing Zhengyuan Chuangshi Consulting Co., Ltd., Hongtai Electric Co., Ltd., Nanjing Kebai Machinery Equipment Co., Ltd. and other eight entities will also be restricted by the U.S. Department of Commerce license, involving transportation work between China and Pakistan, the license application will be based on EAR's 744.2(d) and 744.3(d).

BIS also pointed out that BGI's BGI Gene Research Institute, BGI Gene Technology (Hong Kong) Co., Ltd. and Forensic Genomics International are included in the entity list. The U.S. BIS believes that they pose a great risk to the collection and analysis of genetic data. These entity licenses will be subject to case-by-case review of multiple projects, as well as the presumption of rejection of all other projects subject to EAR constraints.

At the same time, the latest “entity list” of BIS also includes the fourth generation of AI companies, semiconductor companies Wave Group Co., Ltd., Godson Technology, and the National Parallel Computer Engineering Technology Research Center, Qingdao National Laboratory of Marine Science and Technology, and Wuxi Institute of Advanced Technology.The U.S. Department of Commerce believes that the above-mentioned entities violate the national security and foreign policy interests of the United States, which means that the above-mentioned entities need to obtain permission from the U.S. Department of Commerce, and the presumption of rejection of projects subject to EAR.

In addition, BIS also revised the rule names of the previous ten entries of existing Chinese entities, including Beijing Institute of Technology to add 9 aliases and 9 addresses; Beijing University of Aeronautics and Astronautics license policy was revised to reject presumptions, and 10 aliases and 8 addresses were added; Beijing University of Posts and Telecommunications added 2 aliases and 2 addresses; Harbin Engineering University added 2 aliases to the entry; Harbin Institute of Technology added 9 aliases and 9 addresses; Nanjing University of Aeronautics and Astronautics added 5 aliases and 6 addresses to the entry; Nanjing University of Science and Technology added 5 aliases and 5 addresses to the entry; Northwestern Polytechnical University added 7 aliases to the entry And 9 addresses; Sichuan University added 5 aliases and 4 addresses; Tianjin University added 13 aliases and 13 addresses.The above-mentioned Chinese universities and scientific research institutions have previously been included in the export control list of the U.S. Department of Commerce.

As early as the U.S. Congressional hearing on February 28, Alan Estevez, the deputy secretary of Commerce in charge of industry and safety, said that at present, there are 639 Chinese entities on the “entity list” of U.S. export controls to China, of which more than 155 were added during the Biden administration.Since July 2022, BIS has added 53 Chinese entities to the “Entity List”.Regulated areas include artificial intelligence, chip semiconductor, biotechnology, and quantum computing.

He also said that in the 2022 fiscal year (July 1, 2021-June 30, 2022), about 69.9% of export license applications to China were approved, and the remaining applications were rejected or returned.At the same time, according to statistics, after the BIS investigation, nine individuals and companies involved in China were convicted and served a total of 152 months in prison, with criminal fines totaling about US1185,500 and compensation of about US7720,000.In fiscal year 2021, about 66% of criminal penalties and about 40% of administrative penalties were related to export violations to China, totaling nearly 6 million U.S. dollars, and resulted in approximately 226 months in prison.

Estevez reviewed the past year. Regarding China's advanced computing and semiconductor production policies, BIS has launched three measures: in terms of advanced computing, BIS implements foreign direct product rules to restrict the export to China of chips and related products in the field of advanced computing and artificial intelligence, chips and related products in the field of supercomputers, and at the same time uses foreign direct product rules for 28 Chinese entities; in semiconductor production, it restricts the export of certain advanced process chip production tools to China, and restricts the export of U.S. tools to chip producers whose technology exceeds a certain level, and restricts the export to China of items used in the production of semiconductor production equipment.

In addition, BIS has also expanded the list of controlled items to include ultra-wide bandgap semiconductor and ECAD software for computer-aided design of GAAFET architecture (surround gate transistor). These items involve key chip design technologies for advanced processes of 3nm and below; new control of four naturally occurring dual-purpose marine toxins; considering the control of automatic peptide synthesis technology, public comments are being solicited; and considering paying attention to and controlling the export of brain-computer interface (BCI) technology to China and other places, and hosting related conferences to better understand this technology.

On February 16th, BIS and the Ministry of Justice jointly announced the formation of a “Subversive Technology Protection Strike Organization”.Estevez said that the group will be committed to protecting the advanced technology of the United States from being illegally acquired and used by rival countries.The strike force will be stationed in 12 U.S. cities and will be supported by an inter-departmental intelligence team in Washington, D.C.

At the congressional hearing, the chairman of the U.S. House of Representatives Special Committee on China, Republican Congressman Mike Gallagher, and many other U.S. officials involved in China also attended.Gallag said, “The policies of the United States in the next 10 years will lay the foundation for the next 100 years.”

The details of the US 552.7 billion chip subsidy are announced, Raimondo: The Biden administration is considering a pilot plan
In addition to restricting semiconductor exports, the U.S. Department of Commerce is also promoting the return of manufacturing to the United States through chip subsidies.

On February 28th, the official website of the U.S. Department of Commerce announced the rules for subsidies for Chinese companies in the CHIPS and Science Act of 2022, worth a total of 280 billion U.S. dollars, with a total of 10 major items.

According to the bill, the subsidies directly allocated to the chip industry are US552.7 billion, divided into four funds, which will be distributed in five consecutive fiscal years.The U.S. government said this will ensure the supply of chips in the United States, create tens of thousands of high-paying construction jobs and thousands of high-skilled manufacturing jobs, and more importantly, it will drive hundreds of billions of dollars in private sector investment.

The subsidy will be divided into two parts: direct subsidies totaling US338.22 billion; in terms of loans and loan guarantees, direct loans or guaranteed principal of up to US775 billion will be guaranteed.The announcement said that all subsidy payments are not expected to be spent.The CHIP Project Office expects that the total amount of direct subsidies, loans and loan guarantees will not exceed 35% of the project capital expenditure. Among them, most of the direct subsidies will be between 5% and 15% of the project capital expenditure.

Responsible for the implementation of specific projects is the CHIPS Program Office under the National Institute of Standards and Technology (NIST). It is expected that the subsidy process for semiconductor materials and manufacturing equipment and facilities will begin in the late spring of 2023, and the subsidy process for R&D facilities will begin in the early fall of 2023.According to the announcement, starting from February 28, all potential applicants will begin to submit statements of intent.Advanced process semiconductor producers will start pre-application or full application from March 31st; current-generation process, mature process or back-end producers will start pre-application from May 1st, and full application from June 26th.

U.S. Secretary of Commerce Raimondo said that the United States will use the芯片52.7 billion "Chip Act" funds to create at least two cutting-edge semiconductor manufacturing industry clusters by 2030.This marks the initial stage of a plan to bring more chip manufacturing operations back to the United States.

“92% of advanced process chips in the United States depend on TSMC, which is an unsustainable shortcoming."Raimondo said in a speech at Georgetown University on February 24th that the U.S. Department of Commerce hopes that when this plan is completed, the United States will become the only country in the world where every company that can produce cutting-edge chips has an important R&D and mass production manufacturing business.

It is worth noting that China is mentioned in many places in the rules of the Chip Act this time, requiring subsidized entities to notify the U.S. Department of Commerce if they have substantial important transaction plans for semiconductor production capacity expansion (except for mature processes) with “foreign entities of concern” such as China. The U.S. Department of Commerce has the right to withdraw subsidies.Moreover, the applicant must sign an agreement promising that within 10 years from the date of receiving the subsidy, he/she shall not engage in any major transactions with any “foreign entity of concern” to substantially enhance semiconductor manufacturing capabilities, except under some limited conditions.

This means that once Intel, TSMC, Samsung, Micron Technology and other chip companies receive sufficient chip subsidies from the U.S. government, it is likely that they will not invest in mainland China to expand production in the next ten years.

According to previous data from IC Insights, the size of China's chip market in 2020 will be US1144.3 billion, accounting for about 36% of the world; among them, the output value of wafer manufacturing will be US222.7 billion, accounting for about 16% of the world. If you exclude the output value of non-local manufacturers such as TSMC, SK Hynix, Samsung, Intel, etc. in mainland China, the output value of wafer manufacturing contributed by Chinese companies is only US88.3 billion.This means that the domestic manufacturing scale of overseas manufacturers in 2020 will be about 14.4 billion US dollars (about 99.395 billion yuan).

After the "Chip Bill" with bipartisan support was passed by Congress, it was signed into law by U.S. President Joe Biden in August last year.The bill provides激励39 billion in incentives for the establishment and expansion of production facilities, and more than112 billion for research and development and labor development.According to data from the American Semiconductor Industry Association (SIA), the U.S. chip subsidy program has triggered an investment boom. U.S. and foreign manufacturers have announced more than 40 projects with a total investment of nearly 200 billion U.S. dollars.

This means that chip companies' potential investment and production expansion plans of up to 100 billion U.S. dollars are flowing to the United States.

Hunt, who serves as an adviser to the U.S. Department of Commerce, said in a 2022 report that the美元23 billion in incentives provided by the Chip Act will enable three companies with such technologies-Intel, Samsung, and TSMC-to maintain or establish long-term operations in the United States to meet domestic demand by 2027.

“The purpose of this legislation is not to provide subsidies to these companies because they are struggling to survive in a cyclical recession, nor to help companies increase their profit margins in the United States,” Raimondo said. “In fact, the return on our investment here is the realization of our national security goals.Every piece of sophisticated military equipment, every drone, and every satellite depends on semiconductor chips.”

At the same time, on March 3, Raimondo told the media in Washington, D.C., that the Biden administration is considering a pilot program to address the risks of investing in China.She said that the United States does not want to upgrade unnecessarily, but does not want U.S. venture capital funds to invest in semiconductor technology or artificial intelligence technology that the Chinese military will use.

Raimondo estimates that it may take several months for the United States to implement the pilot program.

However, it is not yet clear when the U.S. government will finalize any restrictions on foreign investment.But Raimondo believes that there are many U.S. pension funds that invest in China and the pensions of the people involved. He does not want this plan to be too broad. Any overly broad measures will hurt U.S. workers and the economy.It is expected that the plan may affect the future investment layout of some US dollar fund institutions.

Regarding the current situation between China and the United States, Bill Gates expressed his concern.He told the Financial Times on March 2, “I don't think the United States can successfully prevent China from possessing powerful chips forever. We will force them (China) to spend time and a lot of money to make their own chips.The result of this is just to empty out the idea that we can always sell them chips”"

“You know, we are talking about making your own jet engine, your own software, and your own chip.I think this is a shame, I don't understand the logic."Bill Gates believes that considering China's size and speed, he doesn't think the U.S. approach can bring any huge benefits.

He emphasized: “I hope that the United States and China can get along better.The relationship between our two countries seems to be on a downward trend, even if we have things like health, innovation, climate, etc. that can create a win-win situation between all countries.The most important relationship in the world is the US-China relationship, and I am disappointed and worried about the evolution of this relationship over the past few years.”

(This article first appeared on the Titanium Media App, author｜Lin Zhijia)

 

Disclaimer: The content of this article comes from the Internet. Except for the original articles of Huachuang Intelligent Equipment, other articles shared and reproduced online are only for learning and exchange, non-commercial purposes, and do not represent the views and positions of Huachuang Intelligent Equipment. The articles, pictures and other related content used belong to the original right holder.If you have any objections or infringements, please contact the background for quick processing or deletion, thank you!