BIS imposes significant new export controls on China regarding semiconductors and supercomputers

On 7 October 2022, the Department of Commerce’s Bureau of Industry and Security (“BIS”) issued an interim final rule (“IFR”) amending the Export Administration Regulations (“EAR”) to impose significant new restrictions intended to deny China access to certain semiconductor and advanced computing technology and to inhibit China’s ability to manufacture those items domestically in order to protect U.S. national security and foreign policy interests.  The IFR codifies the recent “is informed” letters that BIS sent to certain U.S. semiconductor and tool manufacturers imposing licensing requirements on the supply of specific semiconductors, including integrated circuits designed for artificial intelligence (“AI”) applications, and certain semiconductor manufacturing tools to China.  In addition, the IFR establishes new Foreign Direct Product (“FDP”) Rules that expand licensing requirements on the supply of foreign-made semiconductors and “supercomputers” to certain Chinese parties on the Entity List, as well as new restrictions on certain semiconductor and “supercomputer” end-uses and end-users and ‘support’ by “U.S. persons” to the Chinese semiconductor and supercomputing industry.

This IFR is being implemented on a staggered basis – some provisions became effective on 7 October, and others will become effective on 12 October or 21 October, but the public has until 12 December 2022 to provide to BIS any comments regarding the rule and its impact on industry.

The IFR implements a number of key changes:

• Adds 4 new Export Control Classification Numbers (“ECCNs”) to the Commerce Control List (“CCL”).  Three of the four new ECCNs (3A090, 3B090, and 4A090) control certain hardware including advanced computing chips; computers, “electronic assemblies,” and “components” that contain such chips and computers; and certain advanced semiconductor manufacturing equipment.  The fourth new ECCN (4D090) controls “software” “specially designed” or modified for the “development” or “production,” of computers and related equipment, “electronic assemblies,” and “components.”

• Applies new unilateral item-based controls for Regional Stability (“RS”) reasons on exports to China of certain advanced computing chips and related semiconductor manufacturing equipment.  The new RS controls apply to the four new ECCNs, five existing ECCNs, and to exports of certain technology for the “production” of certain advanced computing chips from China to any destination.

• Imposes new end-use and end-user-based restrictions on exports, reexports, and in-country transfers of items intended for use in semiconductor fabrication “facilities” in China and “supercomputers” located in or destined for China.  Licenses are required for all items subject to the EAR that meet the parameters of the IFR.

• Revises one and creates two new FDP Rules designed to make the new item-based and end-use controls extraterritorial.  The current Entity List FDP Rule is revised to apply to newly designated footnote 4 entities on the Entity List (“Entity List FDP Footnote 4 Rule”), and two new FDP Rules are added to control certain foreign-made advanced computing and “supercomputer” items.

• Expands controls on 28 preexisting Entity List entities.  The 28 parties on the Entity List are now subject to the Entity List FDP Footnote 4 Rule.

• Imposes a licensing requirement on certain ‘support’ activity provided by “U.S. persons.”  Specific activities of “U.S. persons” who ‘support’ the “development” or “production” of integrated circuits (“ICs”) at a semiconductor fabrication “facility” in China are prohibited without a license.

• Establishes a Temporary General License (“TGL”).  The TGL authorizes the export, reexport, or transfer in-country of items to certain companies in China that are not headquartered in China or certain other countries to minimize supply chain disruptions.

• Expands Scope of Two ECCNs Subject to Anti-Terrorism-Controls.  ECCNs 3A991 and 4A994, both controlled for anti-terrorism (“AT”) reasons, are expanded to add a new paragraph to each ECCN to control certain ICs and advanced computers containing those ICs.

New Export Control Classifications

BIS added new ECCNs to control advanced computing chips and computers, “electronic assemblies” and “components” that contain such chips and computers, and certain advanced semiconductor manufacturing equipment. 

License Requirements for New ECCNs

BIS adds four new ECCNs:

• Effective 7 October 2022
  • ECCN 3B090 controls specified semiconductor manufacturing equipment.
• Effective 21 October 2022
  • ECCN 3A090 controls specified high-performance ICs.
  • ECCN 4A090 controls computers, “electronic assemblies,” and “components,” not elsewhere specified (“n.e.s.”), containing ICs controlled under ECCN 3A090.
  • ECCN 4D090 controls “software” “specially designed” or modified for the “development” or “production,” of computers and related equipment, “electronic assemblies,” and “components” specified in ECCN 4A090.

“Software” and “technology” related to the new ECCNs are controlled in:

• ECCNs 3D001 and 3E001 for ECCNs 3A090 and 3B090 items; and
• ECCNs 4D090 (mentioned above) and 4E001 for ECCN 4A090 items.

The new ECCNs above are subject to the new RS control when exported or reexported to China and for AT reasons, in addition to other reasons for control already applicable to ECCNs 3D001, 3E001, and 4E001.  The new license requirements do not apply to deemed exports or deemed reexports.

License Exceptions for new ECCNs and associated “software” and “technology”

The following license exceptions are available for ECCNs 3A090, 4A090, 3D001 (not for 3B090), 3E001, 4D090, and 4E001:

• License Exception RPL (15 C.F.R. § 740.10);

• License Exception GOV (15 C.F.R. § 740.11): Only pursuant to paragraph (b)(2)(ii) for exports, reexports, and transfers (in-country) made by or consigned to a department or agency of the United States Government; and

• License Exception TSU (15 C.F.R. § 740.13): Only pursuant to paragraphs (a) and (c) for eligible operation technology and software and software updates, respectively.

License Exceptions RPL and TSU are only available if the underlying equipment or software was previously shipped to its current location in compliance with the EAR.

In addition, the only applicable license exception for semiconductor manufacturing equipment controlled under new ECCN 3B090 (and the related “software” and “technology” at ECCNs 3D001 and 3E001) is the specific paragraph of License Exception GOV identified above.

If these ECCNs are also subject to the new restrictions on “supercomputer” end-use items identified in section 744.23, no license exception is available.

License Review Policy

License applications for RS-controlled items identified above destined for end-users in China generally will be reviewed under a presumption of denial, except for end-users in China that are headquartered in the United States or in a country in Country Groups A:5 or A:6.  These applications will be considered on a case-by-case basis and BIS will evaluate, for example, the type of technology, customers, and compliance plans of the relevant parties.

Additional New RS Controls

Elevated Controls on Certain 5A992 and 5D992 Items

Effective 7 October 2022, in addition to the new ECCNs identified in Section I above, the new RS control also applies to ECCNs 5A992 and 5D992 when such items meet or exceed the performance parameters of ECCNs 3A090 or 4A090 and the items are destined for China.  15 C.F.R. § 742.6(a)(6).  Prior to this rule, all 5A992 and 5D992 items destined for China (and elsewhere) were only controlled for AT reasons or for military end-use/users.  The new license requirements do not apply to deemed exports or reexports (i.e., a license is not required for the provision of this technology to a Chinese national outside of China under the new rule).

Controls applicable to the export of certain technology from China to any destination worldwide

Effective 21 October 2022, RS controls also apply to exports from China to any destination worldwide of “technology”:

• for the design, development, or production of advanced computing chips (i.e., 3E001 for 3A090);

• which has been developed by an entity headquartered in China;

• which is the “direct product” of certain software subject to the EAR; and

• which is for the “production” of certain advanced computing ICs and computers or assemblies containing such ICs consistent with the new advanced computing items FDP Rule.

BIS also recommends certain due diligence measures to comply with this new license requirement:

• Parties can obtain proof of the ultimate end-use for items that may be subject to this new licensing requirement and utilize the Model Certificate identified in new Supplement No. 1 to part 734 (“the Model Certificate”) (but use of the Model Certificate alone is not necessarily a comprehensive due diligence process); and

• Entities outside of China that receive 3E001 technology for 3A090 items from China should confirm that a BIS license was obtained to export such technology.
  • Otherwise, there may be a General Prohibition 10 violation, and entities outside of China are prohibited from taking further action.

No license exceptions are available for such transactions and license applications are subject to a policy of denial, except for semiconductor manufacturing items destined to end-users in China that are headquartered in the United States or in a country in Country Group A:5 or A:6. 

New End-Use and End-User-Based Controls for Semiconductor Manufacturing Items and “Supercomputers”

New Section 744.23 imposes license requirements on certain semiconductor manufacturing end-use items used in semiconductor fabrication “facilities” and “supercomputers.”

No license exceptions are available, even if those items are also subject to licensing requirements that allow for license exceptions.  License applications will be reviewed pursuant to a presumption of denial, even if those items are also subject to licensing requirements that have a more favorable license review policy.  The only exception to this license review policy is for applications related to the “development” or “production” of ICs at semiconductor fabrication “facilities” in China that meet certain criteria when those end-users in China are headquartered in the United States or in a Country Group A:5 or A:6 country.

Semiconductor Manufacturing End-Use Items License Requirement

Effective 7 October 2022, a license is required to export, reexport, or transfer (in country) any item subject to the EAR (i.e., U.S.-origin items, items exported from the United States, items that are subject to the EAR due to de minimis U.S.-origin content, or foreign-made items that are subject to any FDP Rule) that meets the “product scope” test identified below when there is “knowledge” that the item is destined for the end-use identified below.

• Any item subject to the EAR meets the “product scope” test if there is “knowledge” the items will be used in:
  • The “development” or “production” of integrated circuits at a semiconductor fabrication “facility” located in China that fabricates integrated circuits meeting any of the following criteria:
    • Logic ICs using a non-planar transistor architecture or with a “production” technology node of 16/14 nanometers or less;
    • NOT AND (NAND) memory ICs with 128 layers or more; or
    • Dynamic random-access memory (DRAM) ICs using a “production” technology node of 18 nanometer half-pitch or less; or
• Any item subject to the EAR and classified in any ECCN in Product Groups B, C, D, or E in Category 3 when there is “knowledge” that the item will be used in:
  • The “development” or “production” of ICs at any semiconductor fabrication “facility” located in China, but you do not know whether such semiconductor fabrication “facility” fabricates ICs that meet any of the following criteria:
    • Logic ICs using a non-planar transistor architecture or with a “production” technology node of 16/14 nanometers or less;
    • NOT AND (NAND) memory ICs with 128 layers or more; or
    • Dynamic random-access memory (DRAM) ICs using a “production” technology node of 18 nanometer half-pitch or less; or
• Any item subject to the EAR when there is “knowledge” that the item will be used in the “development” or “production” in China of any “parts,” “components” or “equipment” specified under ECCNs 3B001, 3B002, 3B090, 3B611, 3B991, or 3B992.

“Supercomputer” End-Use Items License Requirement

Effective 21 October 2022, section 744.23 will also impose new restrictions on “supercomputers.”  A license will be required to export, reexport, or transfer (in country) any item subject to the EAR  that meets the “product scope” test identified below when there is “knowledge” that the item is destined for the end-use identified below.

• The “product scope” test is met if the item exported, reexported, or transferred is:
  • An IC subject to the EAR and specified in ECCNs 3A001, 3A991, 4A994, 5A002, 5A004, or 5A992; or
  • A computer,  “component” subject to the EAR and specified in ECCNs 4A003, 4A004, 4A994, 5A002, 5A004, or 5A992; and
• The end-use scope is met if the item will be used in
  • The “development,” “production,” “use,” operation, installation (including on-site installation), maintenance (checking), repair, overhaul, or refurbishing of a “supercomputer” located in or destined to China; or
  • The incorporation into, or the “development” or “production” of any “component” or “equipment” that will be used in a “supercomputer” located in or destined to China.

“Is informed” notices

In addition to the license requirements in section 744.23, BIS may also inform persons, either individually or by specific notice or EAR amendment, that a license is required for any item subject to the EAR if there is unacceptable risk of use in, or diversion to, the activities described in sections A and B above.

​​​​​​​​​​​​​​Due Diligence Guidance

BIS updated “Know Your Customer” Guidance to address two new scenarios:

• If a customer is a semiconductor manufacturing “facility” involved in the end-uses described in sections A and B above, in addition to the best practice of obtaining an end-use statement from your customer, companies should also evaluate all other available information to determine whether a license is required pursuant to section 744.23.

• If a customer is a reseller, distributor, or other intermediary transaction party, it is a good compliance practice to attempt to obtain confirmation of the actual end-use and end-user of the products.
  • If the intermediary party (e.g., reseller, distributor) cannot furnish these details at the time of the proposed export or reexport because it is a prospective order and no specific customer has yet been identified, as a good compliance practice, a company should attempt to obtain a written statement that the intermediary party understands the license requirements in § 744.23 and will either: (a) inform the company of the actual end-use and end-user, once known, or (b) evaluate the end-use and end-user and apply for any required license for any proposed in-country transfer.

New FDP Rules

The Entity List FDP Footnote 4 Rule, new Advanced Computing FDP Rule, and new “Supercomputer” FDP Rule take effect on 21 October 2022.  No changes have been made to the Entity List FDP Rule that applies to footnote 1 parties on the Entity List.

​​​​​​​​​​​​​​Entity List FDP Footnote 4 Rule  

Under the new FDP Footnote 4 Rule, foreign-produced items are subject to the EAR if they meet both the following two tests: 

• The foreign-produced item meets the “product scope” test if it is:
  • A “direct product” of “technology” or “software” subject to the EAR and identified in ECCNs 3D001, 3D991, 3E001, 3E002, 3E003, 3E991, 4D001, 4D993, 4D994, 4E001, 4E992, 4E993, 5D001, 5D002, 5D991, 5E001, 5E002, or 5E991; or
  • Produced by any plant or ‘major component’ of a plant when those items, whether made in the U.S. or a foreign country, are themselves a “direct product” of U.S.-origin “technology” or “software” identified in ECCN 3D001, 3D991, 3E001, 3E002, 3E003, 3E991, 4D001, 4D993, 4D994, 4E001, 4E992, 4E993, 5D001, 5D991, 5E001, 5E991, 5D002, or 5E002; and
• The foreign-produced item meets the “end-user scope” test if there is “knowledge” that:
  • The foreign-made item will be incorporated into, or used in the “production” or “development” of any “part,” “component,” “or “equipment” produced, purchased, or ordered by any footnote 4 entity; or
  • Any footnote 4 entity is a party to any transaction involving the foreign-made item (including as a “purchaser,” “intermediate consignee,” “ultimate consignee,” or “end-user”).

While most ECCNs subject to the Entity List FDP Rules are the same for footnote 1 and footnote 4 entities, ECCNs 5D002 and 5E002 are subject only to the new Entity List FDP Footnote 4 Rule. 

28 pre-existing entities on the Entity List are designated with a footnote 4 making foreign-made items destined to the end-users or involving these end-users subject to the Entity List FDP Footnote 4 Rule.  The reasons for these designations include (i) participation in the development of “supercomputers” believed to be used in nuclear explosive activities, (ii) involvement in exascale high performance computing and ties to military end-uses and end-users, and (iii) involvement in activities that ‘support’ China’s military actors, its destabilizing military modernization efforts, and/or its weapons of mass destruction (“WMD”) programs.  The 28 entities are included at Annex A.

The licensing review policy is identified in the footnote 4 entities’ entry on the Entity List.  No license exceptions apply to these entities.  The licensing requirements of section 744.23 could also apply to the footnote 4 entities and should also be reviewed.  If a footnote 4 entity is subject both to this FDP rule and the licensing requirements of section 744.23, no license exception would apply (even if a license exception is made available for the footnote 4 entity at a later date).

Advanced Computing FDP Rule

Foreign-produced items are subject to the EAR if those items meet both they meet the following two tests of the new Advanced Computing FDP rule: 

• The foreign-made item meets the “product scope” test if the foreign-made item is:
  • The “direct product” of “technology” or “software” – the foreign-produced item meets both the following two conditions:
    • The foreign-produced item is the “direct product” of “technology” or “software” subject to the EAR and enumerated in ECCNs 3D001, 3D991, 3E001, 3E002, 3E003, 3E991, 4D001, 4D090, 4D993, 4D994, 4E001, 4E992, 4E993, 5D001, 5D002, 5D991, 5E001, 5E991, or 5E002;

and

• • • The foreign-produced item (i) is specified in ECCNs 3A090, 3E001 (for 3A090 items), 4A090, or 4E001 (for 4A090 items), or (ii) is an IC, computer, “electronic assembly,” or “component” specified elsewhere on the CCL but that meets the performance parameters of ECCNs 3A090 or 4A090; or
  • The product of a complete plant or ‘major component’ of a plant that is a “direct product” – the foreign-produced item meets both the following two conditions:
    • The foreign-produced item is produced by any complete plant or ‘major component’ of a plant located outside the United States when those items, whether produced in the U.S. or a foreign country, are the “direct product” of U.S.-origin “technology” or “software” enumerated in ECCNs 3D001, 3D991, 3E001, 3E002, 3E003, 3E991, 4D001, 4D090, 4D993, 4D994, 4E001, 4E992, 4E993, 5D001, 5D002, 5D991, 5E001, 5E991, or 5E002; and
    • The foreign-produced item (i) is specified in ECCNs 3A090, 3E001 (for 3A090 item), 4A090, or 4E001 (for 4A090 items), or (ii) is an IC, computer, “electronic assembly,” or “component” specified elsewhere on the CCL but that meets the performance parameters of ECCNs 3A090 or 4A090; and
• The foreign-produced item meets the “destination scope” test if there is “knowledge” that the foreign-produced item is:
  • Destined to China or will be incorporated into any non-EAR99 “part,” “component,” “computer,” or “equipment” that is destined to China; or
  • Technology developed by any China-headquartered entity for the “production” of a mask or an integrated circuit wafer or die. 

Items subject to the new Advanced Computing FDP Rule are not just foreign-made products that meet the parameters of the newly added ECCNs 3A090 and 4A090, but are also any foreign-made item that is enumerated elsewhere on the CCL that meets the performance parameters of ECCNs 3A090 and 4A090.  Additionally, the destination scope of the Advanced Computing FDP rule may apply to entities outside China that are subsidiaries of entities headquartered in China when those non-China subsidiaries are producing technology for the “production” of a mask or an integrated circuit wafer or die.

BIS encourages use of the Model Certificate identified in Supplement No. 1 to part 744 to obtain written certification from a supplier if an item would be subject to the EAR in the future under the Advanced Computing FDP Rule.  However, BIS does not view use of this Model Certificate as the only step in a company’s compliance process.

License applications for foreign-made items subject to the EAR pursuant to the Advancing Computing FDP rule will be reviewed under a policy of denial.  If the items are semiconductor manufacturing items destined to end-users in China that are headquartered in the United States or in a country in Country Group A:5 or A:6, such applications will be considered on a case-by-case basis, reviewing factors such as technology level, customers, and compliance plans.

“Supercomputer” FDP Rule

Foreign-produced items are subject to the EAR if those items meet the following two tests of the new “Supercomputer” FDP rule: 

• The foreign-made item meets the “product scope” test if the foreign-made item is:
  • The “direct product” of “technology” or “software” subject to the EAR and enumerated in ECCNs 3D001, 3D991, 3E001, 3E002, 3E003, 3E991, 4D001, 4D993, 4D994, 4E001, 4E992, 4E993, 5D001, 5D991, 5E001, 5E991, 5D002, or 5E002; or
  • Produced by any complete plant or ‘major component’ of a plant located outside the United States when those items, whether produced in the U.S. or a foreign country, are the “direct product” of U.S.-origin “technology” or “software” enumerated in ECCNs 3D001, 3D991, 3E001, 3E002, 3E003, 3E991, 4D001, 4D994, 4E001, 4E992, 4E993, 5D001, 5D002, 5D991, 5E001, 5E002, or 5E991; and
• The foreign-made item meets the “country and end scope” test if the foreign-produced item is:
  • Used in the design, “Development,” “production,” operation installation (including on-site installation), maintenance (checking), repair, overhaul, or refurbishing of, a “supercomputer” located in or destined to China; or
  • Incorporated into, or used in the “development,” or “production, of any “part,” “component,” or “equipment,” that will be used in a “supercomputer” located in or destined to China. 

The product scope, end-use scope, and country scope of the “Supercomputer” FDP rule generally match the license requirements in section 744.23 so items that meet the terms of the “Supercomputer” FDP rule should also require a license under section 744.23 of the EAR.

Effective 21 October 2022, part 772.1 defines “supercomputer” as:

A computing “system” having a collective maximum theoretical compute capacity of 100 or more double-precision (64-bit) petaflops or 200 or more single-precision (32-bit) petaflops within a 41,600 ft³ or smaller envelope.

Note 1 to “Supercomputer”:  The 41,600 ft³ envelope corresponds, for example, to a 4x4x6.5ft rack size and therefore 6,400 ft² of floor space.  The envelope may include empty floor space between racks as well as adjacent floors for multi-floor systems.

Note 2 to “Supercomputer”:  Typically, a “supercomputer” is a high-performance multi-rack system having thousands of closely coupled compute cores connected in parallel with networking technology and having a high peak power capacity requiring cooling elements.  They are used for computationally intensive tasks including scientific and engineering work. “Supercomputers” may include shared memory, distributed memory, or a combination of both.

“License Requirement for “U.S. persons” ‘support’ activity for the “development” or “production” of ICs

Effective 12 October 2022, a license is required for the activities described below, which could involve ‘support’ of WMD end-uses under section 744.6.  No license exceptions are available, and there is license review policy of denial (except for end-users in China that are headquartered in the United States or in a country in Country Group A:5 or A:6). 

The following activities undertaken by a “U.S. person” require a license:

• Shipping, transmitting, or transferring (in-country) or facilitating the shipment transmission, or transfer to or within China of any item not subject to the EAR, that you know will be used in the “development” or “production” of ICs at a semiconductor fabrication “facility” located in China that fabricates ICs meeting any of the following criteria:
  • Logic integrated circuits using a non-planar architecture or with a “production” technology node of 16/14 nanometers or less;
  • NOT-AND (NAND) memory integrated circuits with 128 layers or more; or
  • Dynamic random-access memory (DRAM) integrated circuits using a “production” technology node of 18 nanometer half-pitch or less; or
• Shipping, transmitting, or transferring (in-country), facilitating the shipment transmission, or transfer to or within China, or servicing of any item not subject to the EAR that:
  • Meets the parameters of any ECCN in Product Groups B, C, D, or E in Category 3 of the CCL; and
  • You know will be used in the “development” or “production” of ICs at any semiconductor fabrication “facility” located in China, but you do not know whether such semiconductor fabrication “facility” fabricates ICs that meet any of the criteria identified above; or
• Shipping, transmitting, or transferring (in-country), facilitating the shipment transmission, or transfer to or within China, or servicing of any item not subject to the EAR and located in China that meets the parameters of ECCNs 3B090, 3D001 (for 3B090), or 3E001 (for 3B090), regardless of end-use or end-user.

BIS can also inform “U.S. persons” that a license is required because an activity could involve the type of ‘support’ to end-uses or end-users described in section 744.6.

Implementation of TGL

BIS announced a new temporary general license (“TGL”), effective from 21 October 2022 through 7 April 2023, that authorizes exports, reexports, in-country transfers, and exports from abroad destined to or within China by companies not headquartered in Country Groups D:1 or D:5 or E:

• to continue or to engage in integration, assembly (mounting), inspection, testing, quality assurance, and distribution of items covered by ECCNs 3A090, 4A090, and associated software and technology in ECCNs 3D001, 3E001, 4D090, or 4E001;

• or any item that is a computer, integrated circuit, “electronic assembly” or “component” and associated software and technology, specified elsewhere the CCL which meets or exceeds the performance parameters of ECCNs 3A090 or 4A090. 

The TGL does not authorize:

• the export, reexport, in-country transfer, or export from abroad to “end-users” or “ultimate consignees” in China;

• activities involving Entity List entities; or

• activities involving restricted end-uses or end-users.

The exporter, reexporter, or transferor must retain the name of the entity receiving the item and complete physical address of the item’s destination in China, and the location of that company’s headquarters prior to using the TGL.  BIS may extend or modify the TGL as warranted by BIS (including if it receives such requests via comments).

Expanded Scope of AT-Controlled Commodities

The scope of two pre-existing ECCNs subject to AT controls is expanded:

• ECCN 3A991 is revised to add 3A991.p for specified high performance ICs; and

• ECCN 4A994 is revised to add 4A994.1 for computers, “electronic assemblies,” and “components,” n.e.s., containing ICs in 3A991.p. 

Items enumerated in the two new paragraphs are controlled for AT reasons, as are associated “software” and “technology” ECCNs at 3D991, 3E991, 4D994, and 4E992.

Deemed exports or reexports of associated “technology” and “software” that did not require a license prior to the IFR only require a license if the “technology” or “software” released exceeds the scope of the “technology” or “software” already in the foreign national’s possession.  In other words, even if the “software” or “technology” to be released is classified under the same ECCN as “software” or “technology” that foreign national previously received, if the “software” or “technology” is different in scope from previously received, a license will be required.

* . * . *

Given the prevalence of the use of semiconductors across various industries, the new controls summarized above have the potential to impact a wide range of companies in the United States, China and elsewhere.  Demonstrating this significance, BIS estimates that these new controls have the potential to result in 1700 additional license applications to BIS per year. 

While these changes to the EAR were published as an interim final rule with implementation staggered on three different days in October (i.e., 7 October, 12 October, and 21 October), industry has until 12 December 2022 to provide to BIS any comments regarding the IFR and its impact on industry.

Next steps

Companies in the semiconductor industry, and those that use semiconductors in their manufacturing process, should assess the impact of the IFR on their own organization and their broader supply chain. 

Please reach out to any of the Hogan Lovells contacts listed above with any questions.

Annex A

The 28 Entity List Entities with New Footnote Designation​​​​​​​

The 28 revised entities with new footnote designation as discussed in Section VII are:

• Beijing Institute of Technology;
• Beijing Sensetime Technology Development Co., Ltd.;
• Changsha Jingjia Microelectronics Co., Ltd.;
• Chengdu Haiguang Integrated Circuit;
• Chengdu Haiguang Microelectronics Technology;
• China Aerospace Science and Technology Corporation (CASC) 9th Academy 772 Research Institute
• Dahua Technology;
• Harbin institute of technology;
• Higon;
• IFLYTEK;
• Intellifusion;
• Megvii Technology;
• National Supercomputer Center Zhengzhou;
• National Supercomputing Center Changsha (NSCC-CS);
• National Supercomputing Center Guangzhou (NSCC-GZ);
• National Supercomputing Center Jinan;
• National Supercomputing Center Shenzhen;
• National Supercomputing Center Tianjin (NSCC-TJ);
• National Supercomputing Center Wuxi (NSCC-WX);
• National University of Defense Technology;
• New H3C Semiconductor Technologies Co., Ltd.;
• Northwestern Polytechnical University;
• Shanghai High-Performance Integrated Circuit Design Center;
• Sugon;
• Sunway Microelectronics;
• Tianjin Phytium Information Technology;
• Wuxi Jiangnan Institute of Computing Technology; and
• Yitu Technologies.

Authored by Anthony Capobianco, Ajay Kuntamukkala, Brian Curran, Stephen Propst, Beth Peters, Aleksandar Dukic, Ashley Roberts, Cayla Ebert, Annika Lichtenbaum, and Hao-Kai Pai.