On January 15, 2025, BIS issued an interim final rule controls targeting integrated circuits (“ICs”) fabricators. BIS is concerned that some IC designers have misrepresented the performance capabilities and intended end use of their designs to third-party fabricators contracted to manufacture the ICs. This makes it difficult for the fabricators to determine whether the correct Export Control Classification Number (“ECCN”) of the ICs they are producing and the corresponding restrictions. To address this circumvention risk, BIS issued additional due diligence requirements for “front-end fabricators”¹ and “outsourced semiconductor assembly and test” (“OSATs”) companies exporting, re-exporting, or transferring (in-country) advanced ICs. This rule went into effect on January 16, 2025, a January 31, 2025, compliance date for certain obligations, and a notice and comment period that runs through March 14, 2025.

Expanded Scope of 3A090.a. BIS imposed a presumption that an item is 3A090.a and designed or marketed for datacenter whenever a front-end fabricator or OSAT company is seeking to export any “applicable advanced logic integrated circuit.”² This presumption can be overcome in one of three ways:

• The export is to an “Approved” or “Authorized” 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:5³ and the fabricator verifies the transistor count of the final chip; or

• The chip is packaged by an “Approved” outsourced OSAT company that verifies the transistor count of the final chip.

“Approved” and “Authorized” IC Designers and OSATs. BIS introduced a list of “approved” IC designers and OSATs, which BIS has determined to present a low risk of diversion. The rule also establishes the application process for companies seeking to be added, modified, or removed from the lists of “Approved” IC designers and OSATs. There is no equivalent list of “approved” front-end fabricators.

The new rule also introduced a definition of an “authorized” IC designer. Prior to April 13, 2026, “authorized” IC designers are companies that (1) are headquartered in Taiwan or a close U.S. ally (i.e., Group A:1 or A:5); (2) are neither located in nor have an ultimate parent headquartered in Macau or a country in Group D:5; and (3) have agreed to submit applicable information to the front-end fabricator, who must then submit a report to BIS. After April 13, 2026, a company must meet all three requirements and have also submitted an application to become an “approved” IC designer. However, after April 13, 2026, an IC designer can only retain their “authorized” status for 180 days after they submit their application.

Modification of the AIA and ACM License Exceptions. The new rules revised Licenses Exceptions AIA and ACM (which were introduced two days earlier in the “AI Diffusion Framework”) to only apply to ECCNs 3A090.a, 5A002.z, and 5D992.z.1 if they are designed by an approved or authorized IC designer.

New Due Diligence for Front End Fabricators. The new rules introduce additional technical and Know Your Customer (“KYC”) due diligence requirements as well as reporting requirements on front-end fabricators seeking to export to “authorized” IC designers. These are intended to supplement, not replace, existing due diligence obligations.

New Entity List Designations. BIS also issued a final rule that added 16 new companies to its Entity List “due to their involvement in supporting or directly contributing to the development of advanced computing [ICs] that further China’s development of advanced weapons systems, weapons of mass destruction, and high-tech surveillance applications, and because these entities supply Chinese public security end users and pose a risk of diversion to Huawei[.]” This final rule went into effect on January 16, 2025.

Footnotes