30 May 2023 -

How the 2023 export restrictions could affect electronics sourcing

chinese restrictions

Export restrictions against China are expected to create a new set of complications for engineers, writes Electronics360, as the list of products now expands far beyond the traditional set of items on the U.S. Munitions List, Commerce Control List (CCL), and dual-use items, to include:

  • Processors and ASICs with artificial intelligence (AI)
  • Chipsets for 600 Gbps and faster data transfer
  • Radio frequency (RF) ICs for 5G and 6G rollouts
  • Chipsets high processing nodes
  • Semiconductor manufacturing equipment
  • Electronic products
  • EDA software
  • Technical data

“This all covers a huge range of products and effectively cuts off the ability to produce the most advanced technologies in China,” claims Electronics360. “While some might argue the effectiveness and validity of new export controls, companies that have historically relied on China as their manufacturing location may need to consider a new strategy going forward.”

How is sourcing affected?

The new export restrictions expand the list of products requiring export licenses and expand the Entity List. However, it does not change the operational requirements for companies sending components to be assembled into a complete system. Similarly, it does not change the requirements for sending technical data required to fabricate or assemble export-controlled items. The difference is that the new export controls name China specifically and directly target overseas manufacturing of advanced technologies.

Prior to the newest round of export restrictions, companies were already moving their manufacturing operations away from China. According to MDS Transmodal, a group of network economists, the Chinese share of manufacturing was already falling since 2016. In 2022, an American Chamber of Commerce in Shanghai survey showed that the number of companies actively moving production to other countries had doubled.

Electronics360 concludes, “There is a whole other set of liabilities to account for when we start to consider the current state of global production and supply chains. Problems like data security, quality control, facilities security and counterfeiting have all become major problems for companies producing advanced technologies in China. So, the option becomes to stay in China, find an alternative offshore production location or re-shore back to the U.S.”

To avoid electronics supply-chain disruptions, you may also wish to consult an expert in electronics component supply. With more than three decades of supply-chain expertise, Astute Electronics is ideally placed to work with you on your daily component requirements.

For more help with looking at supply chain options, contact Astute Electronics

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