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News

White House Prepares Curbs on Russia’s Access to U.S. Technology

todayFebruary 24, 2022

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Kevin Wolf, a partner in international trade at Akin Gump who worked in export controls under the Obama administration, said the White House could tailor its use of export controls to target certain strategic sectors, for example companies in the aerospace or maritime industry, while bypassing products used by the Russian populace, like washing machines.

“They’re making it clear they’re not trying to take action that harms ordinary Russians,” Mr. Wolf said.

Andy Shoyer, co-lead of global arbitration, trade and advocacy for Sidley Austin, said the restrictions appeared likely to focus on semiconductors and semiconductor equipment. The novel export controls that the United States wielded against Huawei have a powerful reach when it comes to semiconductors, since even chips made abroad are mostly manufactured and tested using machinery based on American designs, he said.

“It’s not just what’s physically exported from the U.S.,” Mr. Shoyer said. “It could encompass a substantial amount of production, because so much of the semiconductor industry relies on U.S. technology.”

The global semiconductor industry, which has been roiled by shortages and supply chain disruptions throughout the pandemic, could face more disruptions given Ukraine’s role in the semiconductor supply chain.

Stacy Rasgon, a senior analyst at Bernstein Research, said Ukraine was an important location for the purification of neon, a gas used in the production of semiconductors. While neon costs were just a tiny fraction of what semiconductor companies pay, “potentially putting a significant fraction of purification capacity at risk sounds somewhat ominous for an industry already struggling with shortages,” he said.

A spokesman for the Semiconductor Industry Association said the group was still evaluating potential impacts related to Russia’s and Ukraine’s roles as materials suppliers. But he said Russia was not a significant direct consumer of semiconductors, accounting for less than 0.1 percent of global chip purchases, according to the World Semiconductor Trade Statistics organization.

Original story from https://www.nytimes.com

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