BIS Expands October 2022 Export Controls on Semiconductor Manufacturing

On October 17, 2023, the US Department of Commerce’s Bureau of Industry and Security (BIS) released two interim rules: “Implementation of Additional Export Controls: Certain Advanced Computing Items; Supercomputer and Semiconductor End Use; Updates and Corrections” and “Export Controls on Semiconductor Manufacturing Items.” BIS also published new additions to its Entity List.

These rules expand BIS’ existing controls on semiconductor and supercomputer equipment and technologies for several countries (most notably, China) that were originally implemented on October 7, 2022.¹ The changes were intended to address perceived loopholes in the October 2022 regulations through a series of changes designed to adjust relevant control parameters, and to address the risk of circumvention.

These include changes to:

1. Impose controls on semiconductor manufacturing equipment.
2. Adjust the parameters that determine whether an advanced computing chip requires a license.
3. Refine the US person restrictions to ensure US companies cannot provide support to advanced China semiconductor manufacturing.
4. Establish licensing requirements for exports of semiconductor manufacturing equipment to additional countries beyond China and Macau to 21 other countries for which the US maintains arms embargoes.
5. Adopt new measures to address risks of circumvention of the controls, including by extending licensing requirements to 40 additional countries that present a heightened risk for diversion to China, as well as to companies headquartered in targeted countries to prevent countries of concern from securing controlled chips through their foreign subsidiaries and branches.

BIS also added to its Entity List two Chinese entities and their subsidiaries (a total of 13 entities), which are involved in the development of advanced computing chips, found to be engaged in activities contrary to US national security and foreign policy interests.

These updated rules are expansive and complex in nature, and should be reviewed carefully based on the facts.

Additional information on these updates can be found in BIS’ press release.²

¹ https://www.mayerbrown.com/en/perspectives-events/publications/2022/11/sweeping-new-us-semiconductor-related-export-controls-on-china

² https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3355-2023-10-17-bis-press-release-acs-and-sme-rules-final-js/file