In October last year, the US Bureau of Industry and Security (BIS) issued what amounted to a declaration of war on China, a 139-page document filled with cumbersome bureaucratic jargon and exhaustive technical details. Such a weighty operation is made all the more remarkable by the relative obscurity of its origins.The BIS is tiny, one of 13 bureaus in the US Department of Commerce, and the smallest-funded federal department: its budget for 2022 is just over $140 million, about an eighth of the cost of a company of Patriot air-defence missiles. The bureau employs about 350 agents and officers who work together to monitor trillions of dollars worth of transactions in progress around the world.

At the height of the Cold War, when export controls on the Soviet camp were at their most stringent, BIS served as an important hub for Western defence, processing as many as 100,000 export licences per year. During a period of relative peace and stability in the 1990s, BIS lost some of its raison d'être, as well as some of its personnel and funding, and the number of licences was reduced to around 10,000 per year. Today, that number is up to 40,000 and growing.BIS is busier than ever, with a massive trade blacklist-i.e., the Entity List (currently 662 pages and growing)-numerous pre-existing multilateral export control agreements, and ongoing actions against Russia and China . "We spend 100 per cent of our time on sanctions against Russia, another 100 per cent of our time on China, and 100 per cent of our time on other things," said Matt Bohlman, deputy assistant secretary of commerce for export administration.

The US says China's use of the technology poses a threat to its national security.
The regulation was announced by the US Deputy Secretary of Commerce, Alan Estevez. He said the aim was to ensure that the US was doing everything it could to prevent "sensitive technologies with military applications" being acquired by China.
He said, "The environment that leads to threats is always changing, and we are updating our policies today to address these challenges." Meanwhile, China has called the controls "technological terrorism". Asian chip producers such as Taiwan, Singapore and South Korea have expressed concern about how the vicious battle will affect global supply chains. The past week has seen three important developments in the conflict over chips.
        In recent years, semiconductor chips have been at the centre of BIS's work. Chips are the lifeblood of the modern economy and the brains of all electronic devices and systems, from iPhones to barf drivers, from data centres to credit cards. A new car may have more than a thousand chips, each managing a different aspect of the vehicle's operation. Semiconductors are also the driving force behind innovations such as quantum computing and artificial intelligence that promise to revolutionise life in the next century. For example, OpenAI's training of ChatGPT was reportedly performed on 10,000 of the most advanced chips currently available.
The U.S. government announced its intention to cripple China's ability to produce or even purchase the highest-end chips through export controls on 7 October. The logic of the measure is simple: advanced chips and the supercomputers and artificial intelligence systems they power could be used to produce new weapons and surveillance equipment. Yet its implications are extremely wide-ranging and significant, targeting a number of security states that are far from limited to China. "The key here is to understand that the U.S. wants to influence China's AI industry," said Gregory C. Allen, director of the Wadhwani Centre for Artificial Intelligence and Advanced Technology at the Center for Strategic and International Studies in Washington. "This aspect of semiconductors is a means to that end."
Although the 7 October controls were implemented in the low-key form of updated export rules, they were essentially designed to root out China's entire advanced technology ecosystem. "The new policy embodied on 7 October is that not only will we not allow China to make any technological advances, we will aggressively reverse their current level of technology," Allen said.C.J. Muse, senior semiconductor analyst at EvercoreISI, put it this way, "If you told me about these rules five years ago, I would have told you it was an act of war - and we're certainly in a state of war."
If these controls succeed, they could affect China's progress for a generation; if they fail, they could have a startlingly counterproductive result, with that future the U.S. is so desperately trying to avoid occurring much sooner. This outcome could shape the U.S.-China rivalry and the future of the global order for decades to come. "Starting in 2022, there are two dates that will be remembered in history," Allen said. "The first is 24 February, when Russia invades Ukraine; the second is 7 October."

China has filed a complaint with the World Trade Organisation over US export controls on semiconductors and other related technologies. This is the first WTO case Beijing has filed against the US since President Biden took office in January 2021. In its submission to the WTO, China accused the US of abusing export controls to maintain "its leadership position in science, technology, engineering and manufacturing." It added that the US actions threatened "the stability of the global industrial supply chain". The U.S. responded that the WTO was not the "appropriate platform" to address national security issues. Thea Kendler, assistant secretary of commerce for export administration, said, "U.S. national security interests require us to act decisively to deny [countries] access to advanced technologies." The complaint makes clear that the US has imposed restrictions on the export of some 2,800 Chinese goods, but only 1,800 of those are allowed under international trade rules. The U.S. has 60 days to try to resolve the issue. If not, China will be able to request a panel of experts to review the case. Earlier this month, the WTO ruled that US tariffs on steel and aluminium imposed under former President Donald Trump violated global trade rules. Two-thirds of China's exports to the United States are subject to the tariffs. The U.S. said it "strongly opposes" the ruling and has no intention of lifting the measures.
Although the design of semiconductors is very complex, it is also very simple in a sense: a large number of circuits are carved into tiny silicon wafers. Switches called transistors control the circuit's on/off switching. When the circuit is on, it's a 1; when it's off, it's a 0. The first chips, invented in the late 1950s, contained only a handful of transistors. Today, the main semiconductors in new smartphones have 10 to 20 billion transistors, each the size of a virus, carved into the silicon structure like a layer cake.
The famous Moore's Law, which describes the rate of progress over the past 60 years, states that the number of transistors that can be mounted on a chip doubles about every two years. Chris Miller, author of Chip War and associate professor of international history at the Fletcher School at Tufts University, has often pointed out that if aeroplanes were improving at the same rate as chips, they would now be travelling at several times the speed of light. No technology in the history of human civilisation has matched the astonishing increase in computing power.
Semiconductor manufacturing plants - fabs - are the world's most expensive factories, carrying out the most complex manufacturing ever seen, and producing on a scale unmatched by any other facility. At the same time, the wider chip industry is an interdependent network of highly specialised regions and companies spread across the globe, with extremely long and complex supply chains making such feats possible - in other words, a product of globalisation. Miller says: "It's hard to imagine how they could achieve such capabilities without the world's smartest people working together." However, it is this interconnectedness that makes the industry so vulnerable to the kind of regulations the Biden administration is pushing.
Only a handful of companies can compete at the cutting edge, and breakthroughs require billions of dollars and decades of research. This creates an industry that consists of a series of bottlenecks. The best-known example is the extreme ultraviolet (EUV) lithography machine made by Dutch manufacturing group Asmac (ASML) to print the layers of a chip. in 1997, Asmac hired Jos Benschop, a young engineer with a Ph.D. in physics, to spearhead the creation of a new system that would help Asmac's semiconductor-industry customers print chips smaller, faster, and more densely packed than ever before. It took four years of proof-of-concept to justify the need to assign a small team to the project alone, and then the team spent another five years building a prototype.In December 2010, at a South Korean research facility, an updated version of the prototype
TWINSCANNXE:3100 was finally successfully commissioned for the first time. It will be nearly a decade before the first products supporting the extreme ultraviolet are available on the market.

Translated with DeepL