Sen. Marco Rubio (R-Fla.) has urged the Department of Commerce (DOC) to blacklist a Chinese chip design firm and impose further restrictions on Chinese tech companies as they allegedly bypass U.S. export-control measures to help U.S.-sanctioned China entities.
In a letter dated Dec. 20 to Commerce Secretary Gina Raimondo, Mr. Rubio raised concerns that Chinese company Brite Semiconductor has used American technology and funds to provide chip design services to Chinese military companies.
“That Brite and other Chinese technology companies have relatively free access to American technology shows yet again that your export-control scheme is allowing China’s rise as a technological power,” Mr. Rubio noted. “It is not enough to prevent China from attaining theoretical capabilities in the future if it means ignoring the lucrative and militarily significant transfer of technology that goes on between American and Chinese firms today.”
The senator made the request following a Reuters investigative report titled “China chip firm powered by U.S. tech and money avoids [President Joe] Biden’s crackdown,” which reveals Brite’s close business ties with two California-based software companies and American investment firms as well as its links with Chinese military companies.
Brite’s customers include at least six Chinese military suppliers, including ComNav Technology, which makes satellite navigation systems for the PLA Navy and PLA Strategic Support Force.
The report noted that Brite has maintained its relationships with top U.S. chip design software firms, Cadence and Synopsys, which make Electronic Design Assistance (EDA) software a significant part of the semiconductor supply chain.
In August 2022, the Department of Commerce imposed export controls on EDA software.
The report also found that Brite has U.S. financial ties. A Wells Fargo Bank-backed Norwest Venture Partners and Biola University, a California-based Christian college, hold stakes in Brite.
“Brite’s example shows that swift action is needed now to prevent China’s chip industrial base from growing stronger,” Mr. Rubio said.
The Florida senator urged the Department of Commerce to apply the same licensing requirements to Brite as those imposed on SMIC. He also urged Ms. Raimondo to tighten further restrictions, including denying or rescinding export licenses of Chinese firms on the blacklist and expanding the list of restricted EDA software to prevent Chinese tech firms from accessing these crucial tools.
Experts told Reuters that Brite illustrates Beijing’s ability to use low-profile companies to skirt American export bans on big-name Chinese firms.
“Brite is a classic example of how a U.S.-China joint venture could end up funneling valuable semiconductor technology to SMIC and the PLA,” said Martijn Rasser, managing director of Datenna, an open-source intelligence company.
Measures
The Biden administration started imposing sweeping export controls last October with bipartisan support in an effort to weaken Beijing chip’s ambition that might threaten U.S. technology dominance.Since then, the United States has introduced a series of additional restrictions to further prevent the Chinese regime from accessing U.S. technology.
In August, President Biden signed an executive order banning outbound U.S. investments in critical technologies that “significantly advance the military, intelligence, surveillance, or cyber-enabled capabilities of countries of concern.”
In October, Chairman Mike Gallagher (R-Wis.) of the House Select Committee on the Chinese Communist Party and Chairman Michael McCaul (R-Texas) of the House Foreign Affairs Committee urged the Biden administration to strengthen the enforcement of export controls on sending advanced computing chips and the machinery required for their production to China.
The two Republicans said that existing U.S. export controls and related policies regarding Chinese tech companies are ineffective. They pointed out that these firms can exploit loopholes, resulting in significant advancements in chip technology that pose a national security risk.
In October, the DOC announced that it finalized the rules under the CHIPS and Science Act to prevent China from benefiting from the $52 billion funds.
