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Chairman John Moolenaar (R-MI) and Ranking Member Raja Krishnamoorthi (D-IL) of the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party (CCP) have sent letters to major semiconductor manufacturing equipment (SME) companies regarding their business dealings with the People's Republic of China (PRC).
The companies receiving the inquiry include KLA, Applied Materials, Lam Research, Tokyo Electron, and ASML. In the letters, Moolenaar and Krishnamoorthi express concern over the increasing sales of SMEs to China, which they say could provide a significant advantage to the People's Liberation Army (PLA) in the development of advanced semiconductors. The lawmakers highlight that China is now purchasing more semiconductor manufacturing equipment than the United States, South Korea, and Taiwan combined, which could not only support China's military activities but also further its ambitions in critical sectors like artificial intelligence. This, they warn, could weaken U.S. strategic competitiveness in relation to China. The lawmakers also address concerns voiced by some SME companies about the impact of stricter U.S. export controls on their competitiveness. They argue that enhanced export controls can coexist with a strong and thriving SME industry. Lawmakers are requesting detailed data from semiconductor equipment companies regarding their business with China for FY2022, FY2023, and YTD FY2024. These include questions on total revenue from PRC transactions, revenue from sales subject to U.S. export licenses, and details about transactions with entities on U.S. sanctions lists. They also seek information on revenue from PRC government-affiliated entities, distributors outside China and the company's top PRC distributors if their revenue exceeds 1 per cent of total revenue. Other requests include data on U.S. export license applications, the volume of SME equipment shipped to China, the top 30 PRC customers, and information on employees involved in export compliance in China. Companies are also asked to report their global manufacturing footprint and any plans for expanding or offshoring production. Additionally, the lawmakers asked for data on the annual volume of SME equipment shipped to China, including the most advanced technology nodes, as well as a list of the companies' top customers in China by revenue. They also inquired about the companies' global manufacturing footprint, their plans for any new or expanded offshoring of production, and the number of employees dedicated to export control and trade compliance work in China. The letters are part of a broader investigation into the role of semiconductor manufacturing equipment companies in China's semiconductor sector and the potential national security implications. (ANI)
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