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China Chip Firm, Powered by US Tech Money, Avoids Biden's Crackdown

Updated: Jan 5

[Edited] A Chinese chip designer, backed by American financial support and powered by US technology, is successfully evading the Biden administration's crackdown on American support for Beijing's semiconductor industry.

Brite Semiconductor, a company partially owned by China's top sanctioned chipmaker, has managed to purchase US software and maintain relationships with American investors, highlighting the challenges faced by Washington in implementing new rules to block support for China's chip sector.


Despite providing chip design services to several Chinese military suppliers, Brite Semiconductor has secured funding from a US venture capital firm supported by Wells Fargo and a Christian university. Additionally, the company continues to have access to sensitive US technology from California-based software companies Synopsys and Cadence Design. It is important to note that there is no evidence to suggest that Brite's relationships with US firms violate any regulations.


The Biden administration has been actively working to restrict the flow of technology and investment to China's chip sector. In October, rules were unveiled to halt certain US exports of chips and chipmaking tools to China, and in August, a ban on specific new US investments in the industry was announced.


The administration has also added numerous Chinese companies to the entity list due to their ties to China's military. Brite Semiconductor has not responded to requests for comment, and both the Commerce Department and the White House declined to comment on the matter. The Chinese Embassy in Washington accused the United States of "blatant economic coercion and bullying in the field of technology," but did not specifically address Brite Semiconductor.

While Brite's access to US technology and funding does not appear to violate any US rules, it highlights the challenges faced by Washington in preventing the use of US equipment and money to advance China's military ambitions. This case suggests that the US will struggle to succeed unless it targets a larger number of companies that have managed to slip under its radar.


Republican Senator Marco Rubio expressed concern over Brite's connections to China's military supply chain, stating that companies with such ties should not have access to American technology and investment. He criticized the Biden administration's approach to export controls and investment restrictions, suggesting that it is not effectively working.

Experts have pointed out that Brite Semiconductor serves as an example of how low-profile companies can be used to circumvent American export bans on well-known Chinese firms. This highlights Beijing's ability to exploit joint ventures between the US and China to gain access to valuable semiconductor technology.


The challenges faced by the Biden administration in curbing support for China's chip sector are evident in Brite Semiconductor's case. The company's connections to SMIC, its largest shareholder, and its provision of chip design services to military suppliers demonstrate the complexity of the issue.


Brite Semiconductor's ability to access US technology and funding despite its ties to China's military supply chain underscores the difficulties faced by the Biden administration in implementing effective measures to restrict support for China's semiconductor industry.

 

  • Brite Semiconductor, a Chinese chip designer, is purchasing US software and has American financial backing, despite its ties to China's military supply chain.

  • The Biden administration has implemented rules to block American support for China's chip sector, but Brite Semiconductor's case highlights the challenges faced in enforcing these measures.

  • Brite Semiconductor has access to sensitive US technology from California-based software companies Synopsys and Cadence Design.

Source: REUTERS

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