US to consider China's Brite Semiconductor concerns amid trade sanction decision-making

US-China relations: The Biden administration has announced its intent to take into account concerns raised by Republican Senator Marco Rubio regarding Chinese chip designer Brite Semiconductor as it evaluates potential additions to trade sanction lists, stated the Commerce Department.

Senator Rubio's apprehensions were outlined in a letter urging the agency to sanction Brite Semiconductor following a December report by Reuters, revealing its partial ownership by blacklisted Chinese chipmaker SMIC. Brite Semiconductor was found to provide chip design services to at least six Chinese military suppliers, drawing attention to its involvement with sensitive technologies.

The Shanghai-based company's financial backing from American entities, including Wells Fargo, and its utilisation of advanced US chip design software by Synopsys and Cadence, further intensified concerns over national security implications.

In his December letter to Commerce Department Secretary Gina Raimondo, Rubio stressed the necessity for prompt action to prevent the bolstering of China's chip industrial base. He urged the imposition of similar licensing requirements on Brite Semiconductor as those imposed on SMIC.

SMIC, China's prominent chipmaker, was previously added to the Entity List, a trade sanction list, due to its alleged ties to the Chinese military industrial complex, a claim SMIC has denied.

The Commerce Department, in a letter dated March 8 and disclosed to Reuters, assured Rubio that it would consider his concerns regarding Brite Semiconductor in its assessment of potential new additions to the Entity List.

While Senator Rubio welcomed the department's acknowledgment of its authority to blacklist Brite Semiconductor and enhance export controls on American chip-design software, he urged for decisive action from the Biden administration.

Meanwhile, the Chinese embassy in Washington denounced the US for extending the concept of national security, calling for an end to discriminatory practices against Chinese companies.

The news surfaces a day ahead of Brite's anticipated debut on the Shanghai stock exchange. Brite Semiconductor witnessed a remarkable surge of 171 per cent in its shares on the first day of trading, contrasting with a modest 0.24 per cent uptick in the blue-chip CSI 300 index.

(With Reuters inputs.)