US chip exporters may face export controls

Imports and Exports | | MIC Customs Solutions |

If Russia invades Ukraine, exports of particular products from the US to Russia may be stopped.

The US semiconductor chip industry has been warned to be ready for new export controls that could come into effect should Russia take military action against Ukraine.

Reports earlier this month in the New York Times had suggested new measures might be implemented, but now Reuters is reporting that the Semiconductor Industry Association (SIA) was told in a phone call with the White House National Security Council that "unprecedented action" may be needed.

Traders could therefore face new restrictions on exports to Russia as part of a range of sanctions against the nation, including financial penalties and blocking access to global supplies.

US president Joe Biden may announce that shipments of chips, consumer electronics and other items produced using American technology are to be halted until further notice.

SIA government affairs official Jimmy Goodrich told Reuters: "We could be in uncharted waters with such a potentially broad export control measure. We are still trying to assess what the ripple effect may be to global supply chains."

The news comes after Russian president Vladimir Putin amassed tens of thousands of Russian troops in and near the border to Ukraine. Although he has denied planning an offensive, he has made a number of demands and failed to rule out as-yet unspecified military action.

This latest report will surely be a blow for the semiconductor industry, which is already suffering from a global shortage of chips that has so far lasted more than a year.

Electronic Design reports some manufacturers are already having to double their orders due to increased market demand since the coronavirus pandemic, the rise of artificial and machine learning and the effects of additional economic factors.

It has even been suggested that the shortage could last for the rest of this decade, so having to factor in additional rules and export controls is not good news for industry stakeholders already struggling to maintain supply chains.