U.S. BIS updates export controls on advanced computing semiconductors and adds entities to the Entity List

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) today released two final rules that (1) update export controls on advanced computing semiconductors, and (2) place additional entities in China and Singapore on the Entity List.

According to today’s BIS release, the rules further restrict China’s ability to obtain certain high-end chips critical for military advantage.

Other changes included in the interim final rule:

• Impose a broader license requirement for foundries and packaging companies seeking to export certain advanced chips, unless certain conditions are met
• Create a process for new companies to be added to the list of Approved integrated circuit (IC) designers and Outsourced Semiconductor Assembly and Tests (OSATs)
• Improve reporting for transactions involving newer customers who may pose a heightened risk of diversion
• Update other parts of the Export Administration Regulations (EAR), including the recent AI diffusion rule (read TradeNewsFlash), so that license exceptions are only available for transactions involving approved or authorized IC designers
• Make technical corrections to December 2 export controls, including to update the definition of “advanced-node integrated circuit” in § 772.1 for dynamic random-access memory (DRAM) chips

The second final rule adds 16 entities to the Entity List, including artificial intelligence (AI) companies that are acting at the behest of Beijing to further the China’s goals of indigenous advanced chip production, which poses a risk to U.S. and allied national security.

Background

The EAR contains a list of names of certain foreign persons—including businesses, research institutions, government and private organizations, individuals, and other types of legal persons—that are subject to specific license requirements for the export, reexport and/or transfer (in-country) of specified items. These persons comprise the Entity List. On an individual basis, the persons on the Entity List are subject to licensing requirements and policies supplemental to those found elsewhere in the EAR.