Sunway Microelectronics; and
Tianjin Phytium Information Technology.
Because of these designations, exports and transfers of most items with significant U.S. content to these Chinese firms will now require a BIS export license under the U.S. Export Administration Regulations (“EAR”). In its April 8 announcement, BIS also said that it will consider any export license applications for these entities with a presumption of denial.
According to the BIS announcement, the seven listed firms supply China’s military with technology that can be used in the development of weapons of mass destruction and hypersonic weapons. The Biden Administration believes that some of that work may depend on the use of advanced semiconductors designed or made with U.S. origin software or other technology. However, much of that semiconductor fabrication takes place at a leading third country semiconductor foundry. The effectiveness of these new Entity List sanctions will then largely depend on the extent to which the supply chains for these seven entities rely upon U.S. origin technology or material in the design or production of such purchased semiconductors.