It is common for Western companies to broadly suspend exports in the immediate wake of new U.S. restrictions, and then resume some later, once they decipher the rules, lawyers say. But national-security experts say the new restrictions are among the toughest the United States has yet enacted to cut off China.
“I see these export controls as being hugely consequential. It goes straight to the heart of Beijing’s efforts to create a domestic world class semiconductor industry,” said Martijn Rasser, senior fellow at the Center for a New American Security. In particular, a new rule preventing “U.S. persons” from supporting certain Chinese chipmakers “won’t just freeze China’s abilities in place, it will actually lead to a degradation over time,” Rasser said.
The export controls, announced Oct. 7, aim to slow China’s ability to produce its own high-end semiconductors, which often have dual uses in commercial and military technology. For now, China still lags behind Taiwan, South Korea and the United States in manufacturing the most high-tech chips.
The controls essentially bar exports to China of American-made manufacturing equipment needed to produce advanced chips. They also bar export of any U.S. tools or components to Chinese factories capable of making high-end semiconductors.
In a novel step that appears to have prompted some companies to broadly suspend trade with China, the rules also bar “U.S. persons” — including American factories, and Americans and U.S. green-card holders who work in foreign factories overseas — from providing support without a U.S. government license to the development or production of such chips for China.
ASML, a Dutch manufacturer of high-end semiconductor manufacturing tools that has U.S. offices and many U.S. employees, immediately instructed its U.S. staff to freeze their interaction with Chinese customers.
“ASML U.S. employees must refrain — either directly or indirectly — from servicing, shipping or providing support to any customers in China until further notice, while ASML is actively assessing which particular fabs are affected by this restriction,” the company told employees in an internal letter last week, an ASML spokesman confirmed.
The company said the freeze applies to U.S. citizens, green-card holders and foreign nationals who live in the United States.
