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

FINDINGS ___________________________________________________________________
Commerce has not granted an export license can often acquire
comparable equipment from competing sellers based in Europe or
Asia who are able to obtain licenses from their governments. This
situation has led U.S. producers of SME and design tools to complain
that U.S. export controls are undermining their international
competitiveness by limiting their access to the world’s fastestgrowing
market for their products – China – while failing in their
basic purpose of limiting Chinese access to advanced semiconductor
technology. On several occasions, the U.S. government has sought to
persuade other Wassenaar members to restrict exports of SME to
China, but has been rebuffed. The U.S. government has been further
hampered by inadequate information with respect to the types of
SME and design equipment and technology that are currently
available to Chinese enterprises from sources outside the United
States.
Taiwan, although not a Wassenaar member, maintains its own
legal controls on the export of sensitive SME and design tools to
China, as well as restrictions on the movement of certain personnel
with semiconductor process and design skills. However, with the
advent of numerous Taiwanese-owned and Taiwanese-managed
foundries on the mainland, concerns have arisen about the potential
flow of sensitive equipment and technology from Taiwan to the
mainland. 29
STANDARD CHIPS WITH PROGRAMMABLE HARDWARE
AND/OR SOFTWARE
Defense system electronic hardware, like that used in commercial
applications, has undergone a radical transformation. Whereas
custom circuits, unique to specific applications, were once widely
used, most information processing today is performed by
29. In March 2002 the Hsinchu District Prosecutors Office was reportedly investigating
allegations that a former TSMC manager in charge of 12-inch wafer development had
sold trade secrets via e-mail relating to 12-inch wafer process technology to an
unidentified Chinese firm. The same month Taiwanese legislators charged the UMC
had illegally sold SME to Chinese companies based in Shanghai via an intermediary
firm incorporated in the Cayman Island, Taipei Times (March 16, 2002).
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