US To Impose Caps On Korean Chip Shops Working In China

The USA's ban on certain semiconductor tech reaching Chinese shores will likely see it set quotas for non-Chinese chipmakers that build their products in the Middle Kingdom, according to Alan Estevez, undersecretary of commerce for industry and security at the Department of Commerce.

Estevez mentioned the quota plan on Thursday at an event run by think tank the Center for Strategic and International Studies.

Quantum computers are the key to breaking codes and reading peoples mail

The undersecretary mentioned [Video] quotas in response to a question about what will happen after the expiration of the one-year licenses that exempt Samsung and SK hynix from sanctions so they continue manufacturing in China.

"We are working with those companies on the way forward," he said. "It will likely be a cap on levels that you grow to in China."

"So, if you are at whatever layer of NAND we will stop somewhere in that range," he added. "It will depend on what the Chinese are doing, too."

It is unclear if Estevez was referring to caps on the volume of manufacturing that can be conducted by the two Korean giants within China, or limits on what they are allowed to produce there.

The overall intent of his speech, however, was entirely clear.

"We are now in a world where technology is the driver of military power, advanced technologies, cutting-edge critical technologies, semiconductors being at the center of those technologies," he declared, and described sanctions on Russia as a deliberate attempt to "slowly strangle Russia's ability to rebuild its military." All US sanctions, he said, aim to ensure technologies developed in the US aren't turned against it by adversaries.

In the field of semiconductors, he said the US enjoys "chokeholds" that allow it to ensure its bans can be enforced through multilateral action.

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But the land of the free does not have that advantage with quantum computers – which he described as "the key to breaking codes and reading people's mail for the future" – nor with biotechnology.

The latter field worries him.

"There is biotech for the good of mankind and then there is biotech for superhuman soldiers that are not for the good of mankind," he warned.

Estevez explained that the US is working on diplomatic mechanisms that will make it easier to enforce sanctions in circumstances where its own strengths, and alliances, make it hard to ban the movement of technologies.

Among those efforts is action to close "evasion routes" that see banned tech reach sanctioned companies through third nations. Estevez said such routes are "the next thing we need to look at" as Uncle Sam works to ensure sanctions on Russia and China have maximum effect. ®