R 101952Z OCT 08
FM SECSTATE WASHDC
TO AIT TAIPEI 0000
INFO AMEMBASSY BEIJING
AMCONSUL CHENGDU
AMCONSUL GUANGZHOU
AMCONSUL HONG KONG
AMCONSUL SHANGHAI
AMCONSUL SHENYANG
USDOC WASHINGTON DC 0000
SECDEF WASHINGTON DC

UNCLAS STATE 109118 
 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: CH ECON ETRD ETTC KSTC PARM PREL TW
 
SUBJECT: RESPONSE TO QUESTIONS OF SEMICONDUCTOR EXPORT 
CONTROLS 
 
REF: TAIPEI 1305 
 
¶1. (U) This cable provides answers to the questions posed by 
Taiwan in reftel concerning the licensing of dual-use 
semiconductor manufacturing equipment (SME) for use in China. 
 AIT is requested to provide the following answers to the 
questions posed by Taiwan. 
 
¶2.  (U) Would the USG have any objection to Taiwan lowering 
its minimum feature size limit to 0.13 microns (130 nm)? The 
USG would not object to Taiwan lowering its minimum feature 
size limit to 130 nm for Taiwan firms established in the PRC. 
 The USG has approved license applications for SME to certain 
FABS/foundries in the PRC with conditions at the 130 nm 
technology node. 
 
¶3. (SBU)  What are the current U.S. restrictions on 
semiconductor manufacturing equipment sold or transferred to 
entities in the PRC?  The USG reviews each individual license 
application for SME to the PRC on a case-by-case basis based 
on the end-use, end-user, and in particular, the material 
contribution it could make to China,s military modernization. 
 
¶4.  (SBU) What conditions are placed on these exports? 
License conditions may vary depending on the consignee and 
end-use, however, in general, an approved license for the 
export of SME from the U.S. to the PRC would contain 
conditions that address the following: 
 
a.  Use restrictions with regard to a specific technology node 
 
b.  Use restrictions for military end-users and embargoed 
destinations 
 
c.  Compliance assurances from the consignee 
 
d.  Restrictions on modifications and upgrades 
 
e.  Restrictions on re-export, transfer, and resale 
 
f.  Use restrictions limiting the equipment for the 
production of uncontrolled devices. 
 
¶5. (U) Are U.S. restrictions under review for possible 
further relaxation?   Revisions to SME controls must be 
approved by all Wassenaar Arrangement participating states 
prior to implementation of those changes by each state.  Each 
year, the USG petitions the WA on appropriate updates to the 
control criteria in the area of SME and integrated circuits. 
 
¶6. (SBU) Could the USG provide details on what the USG 
approved for the Intel semiconductor foundry currently under 
construction in China?  The USG is precluded by law from 
providing details on individual export license transactions. 
 
¶7.  (U) How might U.S. export control regulations affect the 
re-export from Taiwan to China of foundry production 
equipment originally procured from the U.S.?  Most SME does 
not require a license for export from the U.S. to Taiwan 
(except certain MOCVD systems, MBE systems, and in some 
cases, wafer handling systems), however, the re-export of SME 
originally procured from the U.S. that meets the criteria as 
defined in Supplement No. 1 to Part 774, Category 3B001 of 
the Export Administration Regulations from the Taiwan to the 
PRC would require an approved re-export license from the USG. 
 Approved re-export licenses will be conditioned as detailed 
in (4) above. 
 
¶8. (U) Although Taiwan did not specifically request U.S. 
feedback on this issue, please comment on the need to control 
technology transfers as par of effectively controlling regime 
items?  The U.S. controls technology for the development and 
production of SME in the same manner as the actual equipment. 
 This technology is useful in establishing an indigenous 
production capability for SME and therefore, a concern to the 
USG.  Technology license applications are also reviewed on a 
case-by-case basis.  The USG has approved license 
applications for the transfer of development and production 
technology to companies in the PRC on a limited basis; mostly 
to U.S. subsidiaries.  The U.S. believes that control of 
technology is equally if not more important than the control 
of actual items.  The U.S. would note that in some case the 
multilateral regimes control the technology for development 
and production of an item even when the actual item itself is 
not controlled. 
 
¶9. (U) The U.S. appreciates the chance to respond to Taiwan 
on these issues and looks forward to continuing this 
dialogue. 
RICE 
 
 
NNNN 
 



End Cable Text