US Senator Marco Rubio calls on Biden to sanction Chinese chip firm Brite

By Alexandra Alper

WASHINGTON (Reuters) -Republican lawmaker Marco Rubio on Wednesday urged the Biden administration to sanction Chinese chip design firm Brite Semiconductor over its ties to China’s top sanctioned chipmaker and its work for Chinese military suppliers.

Reuters reported last week that Brite Semiconductor offers chip design services to at least six Chinese military suppliers and is part-owned by Semiconductor Manufacturing International Corporation (SMIC), China’s largest chipmaker, which was blocked from receiving some U.S. technology over its apparent ties to the Chinese military industrial complex.

SMIC, which is also Brite’s No.1 supplier, has denied any ties to China’s military.

Despite those relationships, Brite maintains access to U.S. investment and technology, including chip design software from American firms such as Synopsys and Cadence Design, Reuters reported.

In a letter dated Wednesday, first reported by Reuters, Rubio said the fact that Brite and other Chinese technology companies have relatively free access to American technology shows that the current export-control scheme is allowing China’s rise as a technological power.

“Brite’s example shows that swift action is needed now to prevent China’s chip industrial base from growing stronger,” Rubio wrote in the letter addressed to Commerce Department Secretary Gina Raimondo, citing the Reuters report. “I urge you to impose the same licensing requirements on Brite that are imposed on SMIC,” Rubio said.

A spokesperson for the Commerce Department declined to comment on the content of the letter but said the agency had received it and will “reply through appropriate channels.”

Brite, SMIC,and the Chinese foreign ministry did not immediately respond to requests for comment.

The Chinese Embassy in Washington did not comment on Brite but accused the United States of “blatant economic coercion and bullying in the field of technology.”

SMIC was added to the Commerce Department’s entity list by the Trump administration in 2020.

Rubio, who also called for more restrictions on shipments of chip design software to China, is part of a growing chorus of U.S. lawmakers on both sides of the aisle raising concerns about Brite’s role in China’s military supply chain and access to U.S. technology and investment.

Congressman Michael Gallagher, who leads the House of Representatives’ select committee on China, described Reuters’ report as “extremely troubling,” and urged the Commerce Department to do more to stop U.S. technology from reaching China’s military.

Reuters found no evidence that Brite or its U.S. suppliers had violated U.S. export regulations.

Other lawmakers, including Democratic Senator Bob Casey, took aim at Brite’s access to U.S. investors. Silicon Valley-based Norwest Venture Partners, for example, has a 13.5% stake in Brite that is almost wholly backed by Wells Fargo, America’s fourth-largest bank, Reuters reported.

“If House Republican leadership had not blocked my legislation to shed light on China’s access to American technology in critical national security sectors, we would soon have insight into investments made into Chinese companies like Brite Semiconductor,” Casey said, describing a measure he had sponsored to require notification of some U.S. investments in sensitive Chinese industries.

Brite may soon have access to a much broader swathe of investors. The Shanghai Stock Exchange, which had previously paused a bid by Brite to go public over questions about its relationship with SMIC, on Monday gave the green light to an initial public offering.

(Reporting by Alexandra Alper; Editing by Chris Sanders, Lisa Shumaker and Jacqueline Wong)