Foundry Due Diligence Measures Rule Released

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The Bureau of Industry and Security (BIS) is revising the Export Administration Regulations (EAR) to provide additional due diligence procedures for advanced computing integrated circuits (ICs).

This interim final rule (IFR) aims to safeguard U.S. national security and support foundries and Outsourced Semiconductor Assembly and Test (OSAT) companies in complying with EAR provisions related to advanced computing ICs in the supply chain.

Additionally, the IFR updates and clarifies changes introduced in BIS’s December 2, 2024, IFR, titled “Foreign-Produced Direct Product Rule Additions, and Refinements to Controls for Advanced Computing and Semiconductor Manufacturing Items” (FDP IFR). It also extends the deadline for written comments on the FDP IFR to March 14, 2025. 

“Preventing unauthorized parties from gaining access to our most advanced semiconductor technology is a BIS enforcement priority,” said Acting Assistant Secretary for Export Enforcement Kevin J. Kurland. “We will continue to use all of the authorities at our disposal, including investigations and Entity Listings, to counter PRC circumvention of our controls and hold violators accountable.”

Verifiable Technical Requirements

Because existing Red Flags and Entity List designations did not fully ensure compliance, this interim final rule (IFR) imposes verifiable technical requirements (including new definitions) and broader license requirements to limit unauthorized access to advanced computing ICs.

It also establishes approved IC designer and approved OSAT lists, plus enhanced reporting obligations and license exceptions tied to entities that have proven trustworthy. BIS extended the deadline for comments on the FDP IFR to March 14, 2025, and set savings clauses for items already in transit or previously exempt.

Details

Among other changes, the rules:

  • Impose a broader license requirement for foundries and packaging companies seeking to export certain advanced chips, unless one of three conditions is met:
    • The export is to a trusted “Approved” or “Authorized” integrated circuit (IC) designer, who attests that the chips fall below the relevant performance threshold;
    • The chip is packaged by a front-end fabricator in a location outside of Macau or a destination in Country Group D:5 and the fabricator verifies the transistor count of the final chip; or
    • The chip is packaged by an “Approved” outsourced semiconductor assembly and test services (OSAT) company that verifies the transistor count of the final chip.
  • Create a process for new companies to be added to the list of Approved IC designers and OSATs.
  • Improve reporting for transactions involving newer customers who may pose a heightened risk of diversion.
  • Update other parts of the Export Administration Regulations (EAR), including the recent AI Diffusion rule, to ensure that license exceptions are only available for transactions involving approved or authorized IC designers.
  • Make technical corrections to the December 2 export controls, including to update the definition of “advanced-node integrated circuit” in § 772.1 for Dynamic Random-Access Memory (DRAM) chips.
  • Add 16 entities to the Entity List, including AI companies like Sophgo Technologies Ltd., that are acting at the behest of Beijing to further the PRC’s goals of indigenous advanced chip production, which poses a risk to U.S. and allied national security.

Due Diligence Measures for Advanced Computing Integrated Circuits

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