US Chip Export Controls 'Missing the Forest for the Trees,' Policy Analyst Says
The U.S. needs to expand its export controls on semiconductor manufacturing equipment to focus on "foundational" chips and not just advanced ones, policy analyst Dmitri Alperovitch said.
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Alperovitch, founder of the Silverado Policy Accelerator think tank, said U.S. export controls on advanced chips are insufficient because they don't tackle older, mature-node "foundational" chips. Current controls on semiconductor manufacturing equipment "were designed in a too-limited fashion" because they were meant to "limit China's ability to acquire the semiconductor manufacturing equipment technologies, to prevent them from manufacturing advanced chips," he said during a conference this week hosted by the Washington International Trade Association.
His remarks came after lawmakers called for greater restrictions on advanced chip exports to China after Chinese AI company DeepSeek showcased its advanced new AI model (see 2501300067). In Alperovitch's view, however, even updated restrictions will be insufficient.
While the U.S. has restricted advanced chip flows to China, Alperovitch said that when it comes to foundational chips, the U.S. "basically said 'foundational chips? Knock yourself out, China.' And what is China doing? They're investing massive amounts, hundreds of billions of dollars in acquiring that equipment and building fabs, trying to corner the market on foundational chips."
He said that's "going to be a huge problem" because many weapons systems are built with foundational chips. "We're missing the forest for the trees," Alperovitch said. "Yes, advanced is important, but foundational, I would argue, is even more important, and we're paying very little attention to that."
Advanced chips are really only used in AI development and cloud computing, he said, while the vast majority of modern electronics come from less advanced ones. The narrative that "we have to be on the cutting edge" and that "we have to beat Taiwan or China to two nanometers, one nanometer etc.," has a place, but, he said, it risks overshadowing the fact that "foundational chips are also really, really critical."
When asked about possible U.S. vulnerability to Chinese retaliatory export controls on rare earth minerals, Alperovitch said those risks are overblown and the U.S. could counter by ramping up its own critical mineral processing capabilities. According to research from his organization, China doesn't actually mine much rare earth minerals, he said, but rather "up to 90% of processing and refining is done by China."
He believes that the U.S. could do this quickly because "refining minerals is not rocket science. It's not even chip making science. It's actually pretty easy to do, and the technology has been around for over 100 years." The reason the U.S. has not previously done so, in his view, is a lack of political willpower and trade restrictions.
Alperovitch commended the Biden administration for imposing tariffs on rare earth minerals and urged the Trump administration to continue them, calling them "vitally important."