Rep. Shreve on Closing Export Control Gaps for Advanced Chips to China

The Threat of Foundational Chips

• 💡 Foundational or legacy chips are not only critical for military systems but are also being used by adversaries like Russia and Iran.
• ⚠️ China's mass sales of these chips to Russia have enabled the continuation of the war in Ukraine, and they were found in Iranian Shahed drones.

China's Dominance in Legacy Chip Manufacturing

• 📈 China is rapidly expanding its legacy chip manufacturing capacity, with 60% of global new fabs built there in the last two years.
• 🎯 By 2027, China's share of global legacy chip capacity is projected to reach 47%, up from 34% in 2023, while the US remains at 4%.
• 📉 This dominance poses strategic and supply chain risks, as China aims to undercut competitors and control the global market.

US Response and Export Controls

• 🔑 The only effective way to constrain China's growth in legacy chips is through controls on semiconductor manufacturing equipment.
• ⏳ There is a bipartisan agreement on the unacceptability of China's growing chip industry, but a lack of consensus on specific actions.
• 🚀 The US needs to move faster in enforcing export controls and may require hundreds more export control officers with specialized expertise.
• 🤝 The US export control agency's focus on export enforcement, working with subject matter experts, is a critical advantage.