Latest US concessions over chip kit in China add to the confusion

Two South Korean chip makers are now allowed to use their own kit in Chinese factories without getting permission from the US each time.

Yonhap News reports ‘The United States has decided to allow exports of its semiconductor manufacturing equipment to Samsung Electronics and SK Hynix factories in China without a separate approval process’. Those factories mainly make flash memory and DRAM chips, which presumably fall short of being technologies the US is trying to prevent China from being to make, because reasons.

“The US government’s decision means that the most significant trade issue of our semiconductor companies has been resolved,” said Choi Sang-mok, senior presidential secretary for economic affairs, at a briefing attended by Yonhap. Samsung and SK Hynix also expressed relief in a Reuters report on the same topic.

This latest development comes after an eventful week for the game of whack-a-mole that characterises attempts by the US and its allies to suppress China’s technological development. The EU made apparent moves to align more closely with US policy in this matter, then yet another bloc of countries, from which China was conspicuously absent, was formed around the development of telecoms technologies.

By the end of the week a couple of US politicians had written to the US government’s national security advisor to complain that this Byzantine mess of restrictions and exceptions is failing to get the state strategic job done. “After years of oversight and continued pressure from the Congress, BIS still appears more inclined to listen and respond to the industries it regulates than elected law-makers,” lamented the letter.

Essentially the signatories object to compromises being made in the name of allowing people to do business, of which the Korean move seems like a good example. If it were down to them, therefore, everyone would be significantly more impoverished in the name of constraining China.

Aside from the need to balance several conflicting interests, it still seems remarkable that the US feels entitled to tell foreign companies what they can do with their property just because it happens to contain some US intellectual property, and to generally poke its nose into other countries’ business. This presumption is all the more intriguing when juxtaposed with US indignation after China tries to give it a taste of its own medicine.

“If export controls are a national security tool and strategic asset, they must be used,” concludes the letter to the US national security advisor. “BIS has a narrowing opportunity to act and constrain the CCP military before the moment is lost.” A perhaps inadvertent nuance to that statement was to question those very tactics. Right now the US is using up a lot of political capital and global goodwill on a strategy that is producing limited results. Maybe it’s time for a rethink.

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