SIA ISSUE BACKGROUNDERS

EXPORT CONTROLS

Issue:Carefully applied export controls can play a constructive role in protecting national security, as long as they properly account for the importance of U.S. economic and technological leadership to national security.  Unfortunately, the current U.S. export control regime is often out of touch with the global marketplace and the pace of technological change and diffusion.

Importance:SIA members earn 73 percent of their revenues outside the United States.  Our companies have staunch foreign competition in virtually every key sector of the market.  The leadership of the U.S. semiconductor industry has been a crucial contributor to the strength and prosperity of the United States.  To maintain its leadership, the U.S. industry must be able to participate in global markets and utilize the best technical talent from anywhere in the world.

SIA Position: SIA objectives with respect to export controls in 2007 are to:

1. eliminate restrictions that do not protect national security interests but impede the development of civilian technologies;
   
   
2. minimize unilateral restrictions that are ineffective but impose competitive burdens on U.S. industry; and
   
   
3. ensure that civilian integrated circuits (ICs) are not treated as defense articles.

In particular, SIA is addressing the following topics:

• No Munitions Treatment for Radiation-hardened ICs. The march of technology, especially in design, materials and scaling, has increased reliability of commercial semiconductor devices in multiple dimensions, including radiation tolerance.  As a result, we are very close to the point where mass market, commercial semiconductors; as well as products containing these chips including video games, cell phones, and computers; will be captured under International Traffic in Arms Regulations (ITAR) as munitions.  SIA supports the interagency consensus to adjust the ITAR’s technical parameters defining a rad hard chip in order to delay this result, and proposes a long-term solution that would treat radiation-hardened ICs like all other components on the Munitions List.
  
  
• Deemed Export Rule Proposal.  SIA opposes expansion of the deemed export rule, an unnecessary legal contrivance that will greatly diminish the ability of the industry to attract top technical foreign talent to work in the United States.  Instead, SIA recommends a much needed assessment of whether the deemed export rule in its current form is worth retaining. 
  
  
• New Performance Metric for Processors.  SIA advocates the prompt implementation of the new Wassenaar performance metrics for processors which will supplant the hard-to-calculate MTOPS metric and update the control level. 
  
  
• China Catch-all. SIA urges that any proposed regulations to control dual-use technology exports to China be consistent with the objectives listed above, and provided extensive comments in December 2006 on the Administration’s proposed “China Catch-all” regulations.  SIA’s comments included strong reservations about the unilateral nature of the proposed rule and concerns that the Chinese government’s ability and willingness to comply with the provisions in the proposed rule related to end-user certifications, SIA expressed support for the new Validated End—Users concept as having the potential to facilitate the timely approval of export licenses, assuming the program was properly implemented.