US Tightens Export Control Rules
As of today the US Department of Commerce, Bureau of Industry & Security, has implemented additional export control rules concerning semiconductors based on Gallium Oxide and diamond, and CAD software specifically designed for developing GAA (Gate-All-Around) FETs, along with certain technology associated with the production of gas turbine systems. As we have noted previously, the US government has been in discussions with various government’s whose companies might be affected by this new ruling, particularly the government of the Netherlands, where EUV tool vendor ASML (ASML) is located.
The substance of the new rules are as follows:
GaO and diamond based semiconductors are able to operate at higher temperatures and voltages as opposed to those based on Gallium Nitride or Silicon Carbide and are therefore more applicable to military applications. Exports to countries that have been singled out by the US government as having aspirations in conflict with the US would now be required to be licensed.
While there are no current devices using PGC (Pressure Gain Combustion), a process that increases combustion pressure while consuming the same amount of fuel as conventional gas turbine engines, the BIS has cited the large amount of research being done in the area. Citing the use of this technology in missiles, rockets, and military engines, the new rule will require licensing for any technology utilizing PGC, when they might occur in the future.
ECAD systems used to design IC layout and lithography artwork necessary for the production of semiconductor devices has already been included in the EAR rules however the new additions are explicit in that ECAD tools that are for the design of GAA devices, which is a process that is used for complex chip production at nodes below 5nm and allows for the reduction of gate control issues that increase as device size decreases. The application of GAA technology allows for faster, more power efficient, and smaller devices, again with applications for the military being cited in the rules and the BIS is asking for comments from the semiconductor industry as to the scope of the new rule, asking for details as to a variety of design functions in order to make sure all of the possible GAA related CAD design software modules are covered. In order to receive these external suggestions, the implementation of the GAA rule is delayed for 60 days and items that have been previously licensed and are on loading docks or enroute are able to proceed as long as they are received before November 14.
At least on the surface the new rules would not add to the limitations already placed on ASML, given that the government of the Netherlands has not allowed the export of EUV tools to Chinese entities at the behest of the US government, while still allowing export of DUV tools that are able to produce at larger nodes. EDA software vendors face a more complex challenge as the new rules are still broad enough that EDA companies might find that their internal thoughts on the application of certain modules might differ with those of the government, triggering a conflict as to whether they can be sold to those entities that fall under EAR guidelines, which is likely what much of the public commentary concerning the new rules will encompass. Depending on the government’s ultimate decisions, the rule on EDA restrictions can be narrow or broad, with key EDA design firms such as Synopsys (SNPS) and Cadence (CDNS) generating 16.8% and 13.2% of revenue from sales to China in the most recent quarter, the most focused on the change, although the specifics as to GAA design revenue regional sales are not specified.
The substance of the new rules are as follows:
GaO and diamond based semiconductors are able to operate at higher temperatures and voltages as opposed to those based on Gallium Nitride or Silicon Carbide and are therefore more applicable to military applications. Exports to countries that have been singled out by the US government as having aspirations in conflict with the US would now be required to be licensed.
While there are no current devices using PGC (Pressure Gain Combustion), a process that increases combustion pressure while consuming the same amount of fuel as conventional gas turbine engines, the BIS has cited the large amount of research being done in the area. Citing the use of this technology in missiles, rockets, and military engines, the new rule will require licensing for any technology utilizing PGC, when they might occur in the future.
ECAD systems used to design IC layout and lithography artwork necessary for the production of semiconductor devices has already been included in the EAR rules however the new additions are explicit in that ECAD tools that are for the design of GAA devices, which is a process that is used for complex chip production at nodes below 5nm and allows for the reduction of gate control issues that increase as device size decreases. The application of GAA technology allows for faster, more power efficient, and smaller devices, again with applications for the military being cited in the rules and the BIS is asking for comments from the semiconductor industry as to the scope of the new rule, asking for details as to a variety of design functions in order to make sure all of the possible GAA related CAD design software modules are covered. In order to receive these external suggestions, the implementation of the GAA rule is delayed for 60 days and items that have been previously licensed and are on loading docks or enroute are able to proceed as long as they are received before November 14.
At least on the surface the new rules would not add to the limitations already placed on ASML, given that the government of the Netherlands has not allowed the export of EUV tools to Chinese entities at the behest of the US government, while still allowing export of DUV tools that are able to produce at larger nodes. EDA software vendors face a more complex challenge as the new rules are still broad enough that EDA companies might find that their internal thoughts on the application of certain modules might differ with those of the government, triggering a conflict as to whether they can be sold to those entities that fall under EAR guidelines, which is likely what much of the public commentary concerning the new rules will encompass. Depending on the government’s ultimate decisions, the rule on EDA restrictions can be narrow or broad, with key EDA design firms such as Synopsys (SNPS) and Cadence (CDNS) generating 16.8% and 13.2% of revenue from sales to China in the most recent quarter, the most focused on the change, although the specifics as to GAA design revenue regional sales are not specified.
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