China’s 232 Layer Chip Announcement Shames Secretary Raimondo—Too Little, Too Late

Enterprise Tech China’s 232 Layer Chip Announcement Shames Secretary Raimondo—Too Little, Too Late Roslyn Layton Senior Contributor Opinions expressed by Forbes Contributors are their own. International Tech Policy New! Follow this author to improve your content experience. Got it! Aug 4, 2022, 05:21pm EDT | New! Click on the conversation bubble to join the conversation Got it! Share to Facebook Share to Twitter Share to Linkedin On the heels of Idaho’s Micron making the smallest.

fastest, and densest chips, China’s YMTC says . . .

[+] they too can match 232 layer NAND chips. getty Optimism that the federal government would counteract the growing power of Chinese military-linked chipmaker YMTC was high this week, but didn’t last long. Monday news reports noted that “U.

S. officials would ban the export of tools to China used to make NAND chips with more than 128 layers. ” Then a bipartisan group of U.

S. Senators wrote to urge the Commerce Department to add YMTC to the Bureau of Industry and Security (BIS) Entity List. It seemed that the Biden Administration would finally deliver the action that dozens of security and defense experts recommended for some time.

But yesterday YMTC announced it could produce a 232-layer flash memory chip – a major advancement. Tougher restrictions targeting YMTC still may happen, but whatever action happens now will be too little, too late. The Chinese government is one step closer to turning YMTC into a Huawei-style national champion and forcing the exit of other firms from the memory chip market.

YMTC’s progress was known , but the “232-layer advancement suggests YMTC is closing in on global memory giants,” China’s state-run Global Times . China’s success – and America’s loss – reflects the consequences of U. S.

government inaction. For the past two years, leaders like Senator Bill Hagerty , Senator Marco Rubio , Senator Mark Warner , and Representative Michael McCaul called for the Commerce Department to put YMTC on the Entity List. Rep.

McCaul declared , “U. S. and foreign companies … are advancing CCP economic, military, and political priorities.

Put another way, short-term corporate profits are sacrificing long-term American strategic interests. The Administration must use export controls to stop the PRC from further building out its semiconductor supply chain. ” YMTC cannot survive without the semiconductor manufacturing equipment produced by American firms like Lam Research, KLM, and Applied Materials.

It now uses that capability to producing a cutting-edge chips to compete with foreign firms and put them out of business. This outcome could have been avoided, but the Commerce Department ignored multiple pleas from the Senate and dozens of security experts like James Mulvenon who repeatedly warned about YMTC and their links to the Chinese military. This missed opportunity should motivate policymakers to quick and effective action.

Recent reports suggest that the federal government is considering new restrictions for chip making tools aimed toward China-based Semiconductor Manufacturing International Corporation (SMIC). This is welcome as SMIC is also tied to the Chinese military. SMIC’s researchers incorporate SMIC chips and processes in radiation hardening technologies, which are critical for military and space gear.

MORE FOR YOU The 5 Biggest Technology Trends In 2022 ‘Enthusiastic Entrepreneurs’: Pre-IPO Statements On Profitability Prove To Be Larger Than Real Life The 7 Biggest Artificial Intelligence (AI) Trends In 2022 However the technology development demonstrates the current set of restrictions on SMIC which came into force in 2020 have been inadequate. As Rep. McCaul told China Tech Threat last year, “As currently written, the SMIC licensing policy appears designed to give the company access to nearly all the semiconductor manufacturing equipment, technologies, and other goods it needs to make semiconductors.

With BIS denying less than 1 percent of license applications for SMIC, our concerns appear to have been validated. ” ChangXin Memory Technologies (CXMT) is another Chinese company BIS should put in its crosshairs. As China Tech Threat documented extensively in 2020, CXMT enjoys extensive support from the Chinese government and corporate leaders serving in key Communist Party roles.

CXMT follows Chinese playbook for market domination, in this case gunning for control of the dynamic random access memory (DRAM) space. CXMT is also plagued by accusations of patent infringement and an inability to invest in and transition to new equipment to produce the next generation of chips. Its growth strategy will therefore likely depend on stealing IP and acquiring American chipmaking equipment.

CXMT also has the potential disrupt its slice of the chip market. As Emily de la Bruyere of the Foundation for Defense of Democracies put it, “It’s not just YMTC…there are other problematic companies in the same category like ChangXin Memory…across the semiconductor value chain…that are state champions intended to erode this value chain. ” The Commerce Department is clearly failing on its mission to promote and protect US technologies from China.

Many of its existing restrictions are not enforced, and bad players don’t get blacklisted. YMTC should have been on the Entity List years ago; now it’s poised to become the global champion. It looks like CXMT will be another one that gets away if Commerce doesn’t act.

One thing is certain: US tool makers book record profits while Americans’ privacy and security take the backseat. Follow me on Twitter or LinkedIn . Roslyn Layton Editorial Standards Print Reprints & Permissions.