Britain’s stricter controls on semiconductor sales to China

The British government has tightened its regulations on exporting semiconductor technology to China, part of a coordinated effort among Western nations to limit Beijing’s access to advanced microchips.

In 2023, official export control data from the Department for Business and Trade indicates a significant reduction in approved licenses for companies seeking to export semiconductor technology to China. The vast majority of these applications were blocked.

Concerns primarily revolve around potential issues such as Chinese companies replicating Western technology or these chips being incorporated into weaponry or artificial intelligence systems.

Data from the Export Control Joint Unit’s database reveals a stark contrast in license approvals compared to previous years. In 2023, the UK rejected 14 license applications for semiconductor technology while granting only two. In contrast, the prior year saw five refusals and 26 approvals, and in 2021, 26 licenses were issued while nine were denied.

The denied licenses mostly involved semiconductor manufacturing equipment, along with associated components and software necessary for operation. Notably, a majority of these refusals, nine out of the total, were for government customers.

Although the specifics of the technology sought for export are undisclosed in the figures, the notable increase in refusals implies a more stringent stance on exporting British technology.

The UK’s semiconductor strategy, published in June, promised to apply export controls to protect national security. At the time, the Government said it would work with business on potentially expanding how the export control regime applied to semiconductors, vowing to “protect the most sensitive UK semiconductor companies and technologies”.

A Government spokesman said: “We take export controls very seriously, which is why we strengthened the rules to prevent items that could be intended for military use, from falling into the wrong hands.

“Whilst we cannot comment on specific cases, we assess each application on a case-by-case basis against the UK’s strategic export licensing criteria and keep our control regime under regular review to ensure that it properly addresses potential threats whilst continuing to support UK exporters.”

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