USA’s New Laws to Keep Semiconductor Equipment Away From China’s Military: Report

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  • The new restrictions have come at a time when relations between the two countries are worsening
  • India had recently announced tightened FDI norms for several countries including China
  • A recent report by a Korea-based news portal had accused China-located semiconductor companies of stealing semiconductor patent

United States is imposing new restrictions on exports made by companies located in the country to China. The same, as per a report by Reuters, is being done to keep semiconductor equipment and other technology away from China’s military.

USA, back in 2019, had first announced restrictions on China-headquartered Huawei. The relations between the two countries have been deteriorating.

Chinese companies stealing semiconductor patents

A recent report by a Korea-based news portal had accused China-located semiconductor companies of stealing semiconductor patents. The report had also claimed that one of China-based semiconductor companies was keeping its Wuhan-facility operating even during the coronavirus outbreak.

China, as per a report by SEMI, maintained its position as the second largest semiconductor equipment market with sales of $13.45 billion. The country was followed by Korea at $9.97 billion, after receipts fell 44 percent.

New rules will require licenses for U.S. companies

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The new set of restrictions will require US companies to obtain licenses in order to be able to sale certain equipment and technology to China-headquartered companies that support the Chinese Military. Reuters reported that these restrictions might cause a decline in the business of semiconductor industry as well as sales of components to China.

Though the new restrictions will also impact business with Russia and Venezuela, the biggest impact will be on US’ business with China. US-headquartered companies will have to file declarations to do business with these three countries.

Chinese companies, as per the experts the Korea-based news portal spoke to, will continue patent and personnel stealing as well as taking aid from tax incentives. Chinese government, as per the same report, will continue to support the companies until they achieve an economy of scale with.

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