Biden’s Sanctions Fail To Keep Sensitive Chip Technology Out Of China’s Hands

Sanctions on the semiconductor industry put in place by the Biden administration have failed to stop a company associated with the Chinese military from receiving U.S. software and financial backing, according to Reuters.

Brite Semiconductor offers chip design services to at least six Chinese military suppliers and is partially owned by the Chinese state-backed chipmaker Semiconductor Manufacturing International Corporation (SMIC), which has been placed on the U.S. entity list, barring it from receiving some goods from American suppliers, according to Reuters. The chip designer appears to be working around present U.S. sanctions that were put in place as a part of a trade war between the U.S. and China over the semiconductor industry due to its applications in both military and consumer aspects, as well as for technological research.

“Brite is a classic example of how a U.S.-China joint venture could end up funneling valuable semiconductor technology to SMIC and the [People’s Liberation Army],” Martijn Rasser, managing director of the open-source intelligence company Datenna, told Reuters.

A U.S. venture capital firm backed by Wells Fargo and a Christian university invests in Brite, and Brite also has access to technology from Synopsys and Cadence Design, both California-based software companies, according to Reuters. Despite their access to American capital and resources, the chip designer does not appear to be in violation of any U.S. sanctions.

The Biden administration first placed sanctions on the Chinese chip industry in October 2022, blacklisting a number of the country’s semiconductor companies from working with U.S. firms in an attempt to protect American intellectual property. For its part in the trade war, China has placed restrictions on the U.S. over the country’s rare earth metals that are essential for present semiconductor production.

The Congressional U.S.-China Economic Security Review Commission asserted in November that the current sanctions on the Chinese chip industry are not sufficient to prevent the country from gaining access to sensitive technology. Chinese firms have been able to work around the sanctions and receive U.S. technology through other countries and by using dubious claims about the age and capacity of certain equipment, making it not applicable to the sanctions.

The U.S. Commerce Department and Brite Semiconductor did not immediately respond to a request to comment from the Daily Caller News Foundation.

Will Kessler on December 14, 2023

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