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Cablegate: Response to Questions of Semiconductor Export

R 101952Z OCT 08
FM SECSTATE WASHDC
TO AIT TAIPEI 0000
INFO AMEMBASSY BEIJING
AMCONSUL CHENGDU
AMCONSUL GUANGZHOU
AMCONSUL HONG KONG
AMCONSUL SHANGHAI
AMCONSUL SHENYANG
USDOC WASHINGTON DC 0000
SECDEF WASHINGTON DC

UNCLAS STATE 109118


SENSITIVE

SIPDIS

E.O. 12958: N/A
TAGS: CH ECON ETRD ETTC KSTC PARM PREL TW

SUBJECT: RESPONSE TO QUESTIONS OF SEMICONDUCTOR EXPORT
CONTROLS

REF: TAIPEI 1305

1. (U) This cable provides answers to the questions posed by
Taiwan in reftel concerning the licensing of dual-use
semiconductor manufacturing equipment (SME) for use in China.
AIT is requested to provide the following answers to the
questions posed by Taiwan.

2. (U) Would the USG have any objection to Taiwan lowering
its minimum feature size limit to 0.13 microns (130 nm)? The
USG would not object to Taiwan lowering its minimum feature
size limit to 130 nm for Taiwan firms established in the PRC.
The USG has approved license applications for SME to certain
FABS/foundries in the PRC with conditions at the 130 nm
technology node.

3. (SBU) What are the current U.S. restrictions on
semiconductor manufacturing equipment sold or transferred to
entities in the PRC? The USG reviews each individual license
application for SME to the PRC on a case-by-case basis based
on the end-use, end-user, and in particular, the material
contribution it could make to China,s military modernization.

4. (SBU) What conditions are placed on these exports?
License conditions may vary depending on the consignee and
end-use, however, in general, an approved license for the
export of SME from the U.S. to the PRC would contain
conditions that address the following:

a. Use restrictions with regard to a specific technology node

b. Use restrictions for military end-users and embargoed
destinations

c. Compliance assurances from the consignee

d. Restrictions on modifications and upgrades

e. Restrictions on re-export, transfer, and resale

f. Use restrictions limiting the equipment for the
production of uncontrolled devices.

5. (U) Are U.S. restrictions under review for possible
further relaxation? Revisions to SME controls must be
approved by all Wassenaar Arrangement participating states
prior to implementation of those changes by each state. Each
year, the USG petitions the WA on appropriate updates to the
control criteria in the area of SME and integrated circuits.

6. (SBU) Could the USG provide details on what the USG
approved for the Intel semiconductor foundry currently under
construction in China? The USG is precluded by law from
providing details on individual export license transactions.

7. (U) How might U.S. export control regulations affect the
re-export from Taiwan to China of foundry production
equipment originally procured from the U.S.? Most SME does
not require a license for export from the U.S. to Taiwan
(except certain MOCVD systems, MBE systems, and in some
cases, wafer handling systems), however, the re-export of SME
originally procured from the U.S. that meets the criteria as
defined in Supplement No. 1 to Part 774, Category 3B001 of
the Export Administration Regulations from the Taiwan to the
PRC would require an approved re-export license from the USG.
Approved re-export licenses will be conditioned as detailed
in (4) above.

8. (U) Although Taiwan did not specifically request U.S.
feedback on this issue, please comment on the need to control
technology transfers as par of effectively controlling regime
items? The U.S. controls technology for the development and
production of SME in the same manner as the actual equipment.
This technology is useful in establishing an indigenous
production capability for SME and therefore, a concern to the
USG. Technology license applications are also reviewed on a
case-by-case basis. The USG has approved license
applications for the transfer of development and production
technology to companies in the PRC on a limited basis; mostly
to U.S. subsidiaries. The U.S. believes that control of
technology is equally if not more important than the control
of actual items. The U.S. would note that in some case the
multilateral regimes control the technology for development
and production of an item even when the actual item itself is
not controlled.

9. (U) The U.S. appreciates the chance to respond to Taiwan
on these issues and looks forward to continuing this
dialogue.
RICE


NNNN


End Cable Text

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