BIS Announces New Semiconductor Manufacturing Equipment Controls
Summary
On December 2, 2024, the U.S. Department of Commerce, Bureau of Industry and Security (BIS) announced an interim final rule that significantly revises controls on advanced computing and semiconductor manufacturing items (the SME Rule). The SME Rule is highly complex and intended to inhibit China’s ability to develop an indigenous semiconductor ecosystem, including capabilities to manufacture advanced semiconductors, and to slow the PRC’s development of advanced AI. The SME Rule clarifies, inter alia, export restrictions applicable to software license keys. It states that software license keys, which allow users to use software or hardware that is “locked” and unusable without a license key, are classified and controlled under the same Export Control Classification Number as the corresponding software to which they provide access—or in the case of hardware, the corresponding software group. Another key aspect of the SME Rule is its addition of new controls and a corresponding license exception for high-bandwidth memory (HBM), which is found in most advanced semiconductors that power advanced AI models. These controls will impact both HBM stacks and semiconductors that contain HBM stacks. BIS notes that “[a]ll HBM stacks currently in production” exceed the memory bandwidth density threshold specified in the new rule.
