US lawmakers ease proposed curbs on government use of Chinese chips amid corporate pushback
- The measure would have required US federal agencies and their contractors to stop using chips made by Chinese chip makers such as SMIC, YMTC and CXMT
- US business group argued that rooting out such chips from common appliances or forcing contractors to take on the costly task would not further US national security
US senators have scaled back a proposal that placed new curbs on the use of Chinese-made chips by the US government and its contractors, according to a recent draft seen by Reuters, amid pushback from trade groups like the US Chamber of Commerce.
The move is the latest example of industry’s efforts to weaken proposals aimed at crimping China’s burgeoning tech sector, by pointing out how such measures will raise costs.
Top Senate Democrat Chuck Schumer and John Cornyn, a prominent Republican China hawk, unveiled a measure in September that would have required US federal agencies and their contractors to stop using chips manufactured at China’s Semiconductor Manufacturing International Corp (SMIC), as well as products made by Chinese memory chip leaders Yangtze Memory Technologies Co (YMTC) and ChangXin Memory Technologies (CXMT).
The text of a new version of the measure, dated December 1, no longer forbids contractors from “using” the targeted chips and pushes the compliance deadline back to five years from the immediate or two-year implementation deadlines included in the first version.
“This does not clearly prohibit contractors from themselves using covered semiconductor products,” said Robyn Burrows, a lawyer at Blank Rome specialising in federal contracting, when asked to read excerpts of the new draft. Chips made by SMIC are commissioned by companies all over the world and can be found in products as diverse as mobile phones and cars. They are difficult to identify because chips are not typically labelled with the names of the wafer foundry companies that manufacture them.