WSJ: China research institute buying semiconductors made in US

According to an exclusive report from The Wall Street Journal, a research institute in China has bought American-made semiconductors at least a dozen times since 2020. The advanced computer chips came from companies such as Intel and Nvidia.

The Journal review of research papers published by the state-run China Academy of Engineering Physics (CAEP) found at least 34 papers over the past decade referenced using American semiconductors in the research. The chips were used in a range of ways, including analyzing data and generating algorithms.

Many of the chips were bought by the institute’s laboratory studying computational fluid dynamics. The field, while broad, includes the modeling of nuclear explosions.

The Journal semiconductor report was notable because the research institute was one of the first institutions in China to be put on a U.S. export blacklist back in 1997. The point of the blacklist is to prevent the use of any U.S. products for atomic-weapons research by foreign powers. The institute was able to obtain the chips from resellers in China.

“It’s insanely difficult to enforce,” former top Commerce Department official Kevin Wolf said of U.S. export restrictions. The U.S. Bureau of Industry and Security added “as mass-market products move through multiple parties in global supply chains, full visibility on ultimate end users is a large undertaking.”

Sunday’s Journal report came the same day The Associated Press confirmed Japan and the Netherlands agreed to a deal with the U.S. to restrict China’s access to materials used to make semiconductors. The deal comes just months after the Biden administration imposed export controls to limit China’s ability to access chips, saying they can be used to make weapons, commit human rights abuses and improve the speed and accuracy of China’s military logistics.

“In order to maintain its hegemony and self-interests, the U.S. has been abusing export controls, coercing and luring other countries to put up small circles to contain China, and politicizing sci-tech and economic and trade issues,” Chinese Foreign Ministry spokesperson Mao Ning said Monday in response to the deal. “This seriously violates market principles and the international trade order, and China is firmly against it.”