June 8, 2023
Rosella Graham, Nomsa Ndongwe
On June 6, 2023, the James Martin Center for Nonproliferation Studies (CNS) Washington D.C. office, hosted ‘A Conversation on Semiconductors, CHIPS Act, and Export Controls’. The discussion was moderated by CNS Research Associate, Nomsa Ndongwe. The three panelists, Dr. Ian Stewart, Dr. Andrea Viski, and Dr. Ferenc Dalnoki-Veress, addressed the current trends on topics of globalized trade, export controls, the recent CHIPS and Science Act of 2022, and its impact on semiconductors.
Both in-person and Zoom attendees were invited to take part in the conversation, and some participants pre-submitted questions and comments relating to their unique sectors and backgrounds.
In his welcoming remarks, Dr. Stewart highlighted that CNS conducts work on mapping technology supply chains and identifying existing gaps in the current global export control architecture. While public seminars like this event are open to a wider audience, they are just one part of CNS’s work on export controls and emerging technologies. He mentioned that CNS regularly holds practitioner roundtables on these topics and invited participants to reach out to him if they are interested in participating.
Dr. Andrea Viski
Dr. Andrea Viski then kicked off the substantive discussion with an overview of the evolution of export controls and regulatory concerns surrounding their implementation. In 2022, the introduction of export controls on advanced computing and semiconductor manufacturing items by the Biden administration in relation to the People’s Republic of China (PRC) sparked a newfound public interest in the field of export controls. The CHIPS Act, enacted in August of 2022, is a U.S. government bid to address national security and foreign policy concerns regarding the PRC. Dr. Viski outlined that the objectives of export controls were for these controls to be one of many tools used alongside other strategies to make the acquisition or use of weapons of mass destruction more costly, difficult, or impossible. She focused her commentary on six trends that she identified within strategic trade to best understand the implications, effectiveness, and future predictions for new semiconductor controls.
Those trends are:
- The ever-rising importance of intangible transfers of technology.
- Ever more complex supply chains — particularly regarding semiconductors, but also in relation to how state and non-state actors procure goods and technologies, and that it is important to pinpoint vulnerabilities on the supply chain.
- The expanding landscape of the word “security”, especially in the trade control context.
- The expanding notion of the term “dual use,” which was previously defined as goods with both civilian and military uses, but is now expanding to include human rights abuses in some jurisdictions like the European Union, United States, and others.
- The rising use of ad-hoc arrangements by ‘like-minded’ countries to achieve trade control objectives outside of traditional structures like the United Nations and export control regimes (Wassenaar Arrangement, Nuclear Suppliers Group, Missile Technology Control Regime, Australia Group).
- Lastly, the increased use of other forms of control over technology flows, such as Foreign Direct Investment (FDI) screening.
Dr. Ian Stewart
Dr. Stewart continued the conversation by addressing the intersection between emerging technologies and export controls. In his remarks, Dr. Stewart highlighted that emerging technologies could undermine strategic stability, and emphasized the importance of evaluating whether specific emerging technologies are currently subject to any form of controls. According to Dr. Stewart, one challenge in the current geopolitical climate is the difficulty in perceiving how the existing export control regimes in their current format can address all the specific technical controls.
At this time, it is unlikely that all countries that should tighten their export controls on their technologies are willing or able to do so. In order to facilitate the development of controls for technologies that are currently least covered by existing regimes, Dr. Stewart broke down these technologies into two distinct categories:
- emerging technologies that undermine strategic stability
- enabling technologies that facilitate proliferation
Current controls in place cover most emerging technologies in the first category. However, the question remains: how do we build robust frameworks for enabling technologies? Dr. Stewart emphasized that in determining which technologies should be controlled, identifying the ones that could challenge strategic stability or otherwise harm the national security interests of states is critical.
He then presented several avenues for control, including list-based controls, end user-based controls, catch all controls, and industry self-regulation. He emphasized that in looking at key components, materials, software, computer capacities, cybersecurity of export controls and technologies, it is clear that the export controls community has plenty of work to do in terms of evaluating what is already controlled and what is not.
With regard to emerging technology and its relation to the recent CHIPS and Science Act, Dr. Stewart stressed that it is also equally important to examine scientific research networks and trade relationships to understand how state actors acquire emerging technology. Dr. Stewart concluded that countries must adopt holistic control frameworks that go beyond the traditional realm of export control worlds.
Dr. Ferenc Dalnoki-Veress
Dr. Dalnoki-Veress reaffirmed the importance of a holistic approach in his remarks, explaining that the rapid expansion of technology today necessitates such an approach to export controls. He discussed the inextricable link between semiconductors and AI and emphasized that semiconductors are integral to everyday electronics such as smartphones, medical machinery, and key to propelling industries like telecom, health, manufacturing. The semiconductor industry itself is extremely complex, as it requires thousands of people with specialized knowledge and capabilities, with manufacturing and supply components often spread across extensive geographic areas. For example, the consulting company Accenture found in a recent estimate that the components of a chip could travel more than 25,000 miles before they are complete. The interconnected supply chains exemplify the concerns of a single disruption event causing a domino effect due to the increasingly globalized industry. Dr. Dalnoki-Veress concluded by exploring China’s recent innovations in the world of AI, and discussed how Chinese experts are emphasizing brain-inspired computing chips. He explained that this area of research does not require leading edge nodes to produce these chips, as the brain inspired chips do not require excessive power levels and processing between the memory unit and computing unit and emphasized that this is a field to watch.
Discussion and Question and Answer
Ms. Ndongwe reminded audience members of the provisions of the Creating Helpful Incentives to Produce Semiconductors and Science (CHIPS) Act, which invests US$ 250 billion to bolster semiconductor capacity, expand academic research and development, and create a broader, more inclusive workforce. In the Q&A portion, both in-person guests and zoom attendees posed a variety of questions ranging from how to protect the openness of global trade to the importance of military usage of these technologies.
The event was the first of many future CNS DC conversations about the roles of export controls in the world of semiconductors and technology. In the modern world, this technology is changing and improving so rapidly that current controls are simply unable to keep up. Especially with regard to such a globalized trade supply, where a single mechanical chip is part of a much larger supply chain that crosses continents, the need for a holistic approach to export controls has never been more pressing. While the future of technological advancements remains unknown, one thing is certain: the CHIPS and Science Act will increase pressure on policymakers and scientists to collaborate on creating broader controls.
The purpose of the event was to have a broader conversation on export controls and strategic trade to frame the conversation around the topic of the CHIPS Act, semiconductors and strategic trade. CNS is also conducting in depth non-public facing work. If any of these conversations resonated with the audience, they are free to reach out and get in touch about partnering with the Center.
(left) Nomsa Ndongwe, (center) Dr. Ian Stewart, (right) Dr. Andrea Viski
