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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Cary Salsberg who wrote (7176)	9/16/2003 5:21:01 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 25522

Intel calls for end of U.S. fab-tool export controls in China Silicon Strategies 09/16/2003, 3:46 PM ET SAN JOSE -- Fearing that U.S. chip-equipment companies will fall behind its foreign rivals in China, the U.S. government must replace or remove outdated export control laws for semiconductor technologies and fab tools in the Chinese market, according to an official from Intel Corp. David Rose, director of export, import and information security affairs for Intel, also said that the U.S. export control regulations for China are "outdated and unjustifiable" for U.S. fab-tool makers. Progress has been made in some areas, especially when the U.S. government removed the so-called "MTOPS controls" on civil-end use exports of processors and other chips to China and Russia. But for years, U.S. chip-equipment makers have complained that they are at a disadvantage over their foreign rivals in selling fab tools into China, due to complex and cloudy export control laws. The series of complex export regulations were formulated at the height of the Cold War with communist countries in the 1970s and 1980s. "Export controls represent a significant yet unnecessary impediment on U.S. participation and success in the Chinese semiconductor market," Rose said during a presentation at the Taiwan+China Semiconductor Outlook conference in San Jose. "Outdated and unjustifiable restrictions on the export to China of U.S. finished products, as well as on manufacturing equipment and related technology, currently produce competitive costs to U.S. companies, particularly as foreign competitors vie for market leadership," Rose said. "Without changes in current U.S. export control policy towards China, U.S. companies will increasingly fall behind in this crucial market, and, by extension, the global market." The stakes are high in China. Amid a slowdown in most of Asia, Europe, and the United States, semiconductor capital spending in China is expected to hit $7 billion in 2003, up 300 percent over 2000, according to Rose. The China government's current Five-Year Plan calls for the construction of as many as 11 new fabs in China through 2005, and a total of 20 or more fabs "may start up over the next half-decade, some of which will be equipped with cutting-edge 300-mm production capability," according to Rose. To sell into China, U.S. chip and fab-tool makers must obtain export licenses--of which are unfair, he said. "Today's export controls on chip manufacturing capability present a significant competitive disadvantage," he said. "The need to obtain export licenses begins at 530 MTOPS for semiconductor development, a level far behind the state of the art. It represents the approximate performance of the Pentium II at 450-MHz." Chip-equipment makers are also "tightly controlled by outdated regulations, even though U.S. competitors face less stringent control regimes," he said. The solution? "The U.S. should generally replace its policy of controls on exports of commercial semiconductor technology to China with a policy of staying ahead technologically," he said. The Intel official also suggested a license-free zone that enables U.S. companies to transfer any technology without a license to China.