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High Performance Microchip Supply - Under Secretary of Defense ...

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FINDINGS ___________________________________________________________________<br />

A similar reexamination <strong>of</strong> integrated circuits manufacturing is<br />

needed to assure continued ability economically to design and<br />

produce custom parts at the leading technology edge. An industry<br />

need for the same service is also growing. Today, there is little<br />

commercial requirement for such capability, just as there was no<br />

requirement for the mini-mills until an economic collapse in the U.S.<br />

steel industry forced the issue. Lacking a business disaster, DOD’s<br />

need for custom microelectronics trusted sources is pressing, and<br />

therefore the burden <strong>of</strong> prompting development <strong>of</strong> this capability<br />

falls to DOD. The DOD does not own the complete burden for action<br />

(for instance ASIC manufacturers and the semiconductor<br />

manufacturing equipment industry must participate), but certainly<br />

the leadership burden must be borne by DOD.<br />

The tiered trusted foundry approach <strong>of</strong>fers a relatively short-term<br />

solution to trusted leading-edge custom circuit supply. In the long<br />

run, it is not a realistic approach to satisfying DOD and the<br />

commercial industry’s needs. New methods and equipment concepts<br />

must be found that make custom circuit fabrication economical.<br />

SEMICONDUCTOR MANUFACTURING EQUIPMENT EXPORT<br />

CONTROLS<br />

Dual-use technology exports that pose national security or foreign<br />

policy concern are regulated pursuant to the Export Administration<br />

Act <strong>of</strong> 1979. Advanced semiconductor manufacturing equipment<br />

and technology are regarded as sensitive, and export to China<br />

requires issuance <strong>of</strong> an export license by the Department <strong>of</strong><br />

Commerce (DOC). Applications for export licenses are reviewed by<br />

the DOC as well as the Department <strong>of</strong> <strong>Defense</strong> and the State<br />

Department. Decisions to grant or not grant a license are determined<br />

on a case-by-case basis. 28 Since the end <strong>of</strong> the cold war, U.S. export<br />

28. The Department <strong>of</strong> Commerce also has an export status called a "License Exception.” A<br />

License Exception, once granted to an semiconductor manufacturing equipment (SME)<br />

supplier allows that supplier to ship a specific class or model <strong>of</strong> SME covered by the<br />

license exception to a particular end user (e.g. SMIC in China) without having to ask for<br />

an individual license for each piece <strong>of</strong> equipment. The equipment is shipped without<br />

delay.<br />

42 _________________________________________________________ DSB TASK FORCE ON

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