A number of technology companies that make semiconductor manufacturing possible are coming under scrutiny from Capitol Hill, as the United States weighs further export restrictions to try to hold back China’s technological advancement.
The House Select Committee on the Chinese Communist Party, which has targeted numerous U.S. companies for their ties to China, sent letters on Thursday to a handful of firms making semiconductor manufacturing equipment, expressing concern about technology sales to China and requesting detailed information about the companies’ sales volumes and top customers.
The committee said the information would help it better understand how much chip-making technology was flowing to China, and the role that was helping to build out China’s chip manufacturing base.
The letters were sent to three U.S.-based companies that make semiconductor manufacturing equipment — Applied Materials, Lam Research and KLA — as well as the Japanese firm Tokyo Electron and the Dutch equipment maker ASML.
These five firms dominate the global market for semiconductor manufacturing equipment, some of the world’s most sophisticated technology, which allows chip makers to fabricate semiconductors with features just a few atoms wide.
The letters were signed by Representatives John Moolenaar, the Michigan Republican who heads the committee, and Raja Krishnamoorthi of Illinois, the Democratic ranking member.
The letters requested that the companies send information before Dec. 1 on their top 30 customers in China by revenue, their sales to companies on certain national security or restricted trade lists, and any plans for offshoring manufacturing from the United States, among other details.
Applied Materials and KLA declined to comment, while Lam Research, ASML and Tokyo Electron did not respond to a request for comment.
The United States began clamping down on China’s access to advanced chips and the technology needed to make them two years ago, asserting that Beijing’s access to the world’s most advanced chips posed a national security threat.
The chips are needed to power high-performance computing and artificial intelligence. Those capacities are used for inventing pharmaceuticals, powering chatbots and studying climate change. But U.S. officials maintain that China can also use them to create new weapons systems, run disinformation attacks and surveil persecuted citizens.
The Biden administration has steadily tightened its technology restrictions on China, and it is weighing another update to its rules. That has touched off a fight among lawmakers, administration officials and company executives over how much the United States should restrain its own industry.
The new rules, which may be issued in the coming weeks, would limit shipments to China of certain advanced memory chips, restrict shipments of machinery to a handful of Chinese chip factories with national security concerns and put dozens of Chinese companies that make chip manufacturing equipment on a restricted trade list, according to people familiar with the policy.
Executives at KLA, Applied Materials and Lam Research have been telling lawmakers and administration officials that rules that are tougher on American firms than their Dutch or Japanese competitors will hamper U.S. technology leadership, and be ineffective at holding China back in the longer term, those people said.
Some lawmakers have recently echoed those claims in letters to the administration, saying the technology controls are causing U.S. companies to lose global market share and leadership. A 2024 study by economists at the Federal Reserve Bank of New York found that export controls had led U.S. and Chinese supply chains to decouple and imposed “significant collateral damage” on U.S. firms.
But others say those arguments are overblown. Analysts have pointed out equipment sellers’ near-record revenue, expanding margins and significantly higher sales in China.
One analysis released by a fellow at the Center for Strategic and International Studies this week contended that there was “no substantial evidence to date to support the notion that recent U.S. semiconductor controls have hindered these companies’ innovative capabilities.”
In separate letters in recent weeks, Representative Michael McCaul of Texas, the Republican chairman of the House Foreign Affairs Committee, and Senator Mark Warner of Virginia, the Democratic chairman of the Senate Intelligence Committee, urged the Biden administration to take more steps to strengthen U.S. technology restrictions on China.
Chip technology shipments to China have surged in the past year, as Chinese firms try to stock up in advance of any further restrictions. In the second quarter of this year, Chinese firms bought more semiconductor manufacturing equipment than companies in South Korea, Taiwan and the United States combined, according to industry data.
In its letter, the House Select Committee on China said these sales were improving China’s capacity to produce its own semiconductors and making the world more dependent on Chinese manufacturing.
“This trend is a direct threat to the United States and its allies’ national and economic security,” it said.
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