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 70 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 2005 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:

• 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 implementation of the new metric for computers - weighted teraflops - be made applicable to processors. The pace of technology advance plus the need for consistent treatment with respect to computer systems demand such a change.
• Raising Licensing Threshold for Processor Technology.
  While President Bush made the proper decision to eliminate licensing requirements for most general purpose, high volume processors, the need for commensurate changes in accompanying technology has been ignored.
• Knowledge Definition.
  SIA believes that the Commerce Department's proposed regulatory expansion of the definition of "knowledge" would create much uncertainty and greater liability for companies with no improvement to national security. The current definition is well understood, accepted and effective in preventing unauthorized exports.
• No Munitions Treatment for Radiation-hardened ICs.
  Due to the potential capture of some commercial ICs under munitions regulation, SIA proposes a policy change that would treat radiation-hardened ICs like all other components on the Munitions List.