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The US is considering restricting the flow of semiconductors into Russia to deter Russian President Vladimir Putin from invading Ukraine. The move would prevent the Russian military and much of the nation’s economy from advancing technologically.
The details of the sanctions are still being decided, but they would rely on similar restrictions that kneecapped Huawei, the Chinese tech company. Though most semiconductors are made overseas, US companies control huge swaths of the larger market, from chip design and manufacturing equipment to process and quality control. By restricting access to those companies' products and services, the US can effectively limit Russian access to the latest chips, even if they’re made in other countries.
“It’s one of the tools that the US has come to prefer because it’s painful, but it doesn’t involve the use of force,” James Andrew Lewis, senior vice president and director of the Strategic Technologies Program at the Center for Strategic and International Studies, told Ars. “It sort of freezes Russia at a technological moment.”
Though most of the restrictions will likely focus on companies that supply Russia’s military, either directly or indirectly, one place where consumers could feel the pinch is mobile phone service. If implemented, the restrictions would “box the Russians out of the 5G market,” Lewis said.
To supply the Russian market, companies like Huaweimay have a few options to deliver 5G-like speeds, but the result would be imperfect. “You can design a broader architecture that gets you some part of the way toward the performance part, but it’s hard because of power consumption with broad 5G deployments,” Triolo said. “You need the throughput, the latency, and the power consumption. It’s really hard to get that without advanced nodes below 7 nm or so.”
The sanctions against Russia would be implemented under the foreign direct product rule, which allows the government to impose restrictions on how companies use US technology, even in other countries. Previously, this rule was mostly aimed at companies that would sell directly to foreign militaries. But under the Trump administration, the rule was extended to include certain semiconductor-related technologies to target Chinese telecom suppliers Huawei and ZTE.
The statutory authority in this area is “fairly broad,” Triolo said. “This rule is sort of like a Death Star. We can point it at things we don’t like, and ‘boom.’” The rule can target individual products or even entire countries “because that’s the way this thing is written. It’s really pretty broad,” he said. “That Death Star can be scaled up from something you can hold in your hand to something huge.”
In this case, Russian companies don’t represent much of a threat, but there’s concern among observers that this move would set a troubling precedent and drive other countries to invest more heavily in alternatives to US technologies.
Semiconductors have become a particular choke point because of US firms’ dominance. Though the majority of chips—and nearly all of the most advanced chips—are made in Asian countries, Triolo said that “you can’t build an advanced semiconductor manufacturing facility without large quantities of US equipment.” US companies control around 50–60 percent of the market for that equipment, he estimated.
US technology is critical even when the end products come from foreign companies. Consider, for example, extreme ultraviolet (EUV) lithography machines from the Netherlands' ASML. They’re required to make chips under 7 nm, and they don’t work without a light source made by Cymer, an ASML subsidiary based in San Diego.
The fact that the Biden administration is considering applying the foreign direct product rule to an entire country means “we’re in uncharted territory here,” Triolo said. In the past, US sanctions have relied on the nation’s financial dominance and the dollar’s status as the world’s reserve currency. Now, the Biden administration is considering using technological supremacy in the same way, and such a move would have a significant impact on the way thousands of companies operate.
“It represents a major attempt, at least, to weaponize US technologies in supply chains in a manner similar to the weaponization of the dollar,” Triolo said. Economic sanctions are a "different and well-developed system that is narrowly focused on the dollar. Now you’re talking about US technology, and that’s much more complicated.”
https://arstechnica.com/tech-policy...d-lock-russia-out-of-5g-advanced-chips/?amp=1
The details of the sanctions are still being decided, but they would rely on similar restrictions that kneecapped Huawei, the Chinese tech company. Though most semiconductors are made overseas, US companies control huge swaths of the larger market, from chip design and manufacturing equipment to process and quality control. By restricting access to those companies' products and services, the US can effectively limit Russian access to the latest chips, even if they’re made in other countries.
“It’s one of the tools that the US has come to prefer because it’s painful, but it doesn’t involve the use of force,” James Andrew Lewis, senior vice president and director of the Strategic Technologies Program at the Center for Strategic and International Studies, told Ars. “It sort of freezes Russia at a technological moment.”
Though most of the restrictions will likely focus on companies that supply Russia’s military, either directly or indirectly, one place where consumers could feel the pinch is mobile phone service. If implemented, the restrictions would “box the Russians out of the 5G market,” Lewis said.
“Death Star”
Today, Russian companies can get 5G equipment from Ericsson and Nokia, but the European companies would likely follow any US sanctions, Paul Triolo, head of geotechnology at Eurasia Group, told Ars. The other major player in the Russian telecom market, Huawei, hasn’t been able to deliver true 5G since the US prevented TSMC from making their chips.To supply the Russian market, companies like Huaweimay have a few options to deliver 5G-like speeds, but the result would be imperfect. “You can design a broader architecture that gets you some part of the way toward the performance part, but it’s hard because of power consumption with broad 5G deployments,” Triolo said. “You need the throughput, the latency, and the power consumption. It’s really hard to get that without advanced nodes below 7 nm or so.”
The sanctions against Russia would be implemented under the foreign direct product rule, which allows the government to impose restrictions on how companies use US technology, even in other countries. Previously, this rule was mostly aimed at companies that would sell directly to foreign militaries. But under the Trump administration, the rule was extended to include certain semiconductor-related technologies to target Chinese telecom suppliers Huawei and ZTE.
The statutory authority in this area is “fairly broad,” Triolo said. “This rule is sort of like a Death Star. We can point it at things we don’t like, and ‘boom.’” The rule can target individual products or even entire countries “because that’s the way this thing is written. It’s really pretty broad,” he said. “That Death Star can be scaled up from something you can hold in your hand to something huge.”
Chokepoint
Companies tend to bristle at these sorts of restrictions because they argue that it limits their access to markets and reduces their revenue, which they use to fund research and development into the next generation of technologies. Lower revenue would mean less money for R&D, which would put their technological dominance at risk, they say. There’s merit to the argument, though others argue that US firms are already so far ahead that even if they stood still, it would take years for other companies to catch up.In this case, Russian companies don’t represent much of a threat, but there’s concern among observers that this move would set a troubling precedent and drive other countries to invest more heavily in alternatives to US technologies.
Semiconductors have become a particular choke point because of US firms’ dominance. Though the majority of chips—and nearly all of the most advanced chips—are made in Asian countries, Triolo said that “you can’t build an advanced semiconductor manufacturing facility without large quantities of US equipment.” US companies control around 50–60 percent of the market for that equipment, he estimated.
US technology is critical even when the end products come from foreign companies. Consider, for example, extreme ultraviolet (EUV) lithography machines from the Netherlands' ASML. They’re required to make chips under 7 nm, and they don’t work without a light source made by Cymer, an ASML subsidiary based in San Diego.
The fact that the Biden administration is considering applying the foreign direct product rule to an entire country means “we’re in uncharted territory here,” Triolo said. In the past, US sanctions have relied on the nation’s financial dominance and the dollar’s status as the world’s reserve currency. Now, the Biden administration is considering using technological supremacy in the same way, and such a move would have a significant impact on the way thousands of companies operate.
“It represents a major attempt, at least, to weaponize US technologies in supply chains in a manner similar to the weaponization of the dollar,” Triolo said. Economic sanctions are a "different and well-developed system that is narrowly focused on the dollar. Now you’re talking about US technology, and that’s much more complicated.”
https://arstechnica.com/tech-policy...d-lock-russia-out-of-5g-advanced-chips/?amp=1
