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U.S. items overseas, and items produced overseas using U.S.-origin components or made using U.S. technology, may still be subject to the Export Administration Regulations. Certain activities of U.S. persons overseas may also be subject to these regulations.

Which equipment for back-end assembly, testing, and inspection is essential for semiconductor production, constituting a "major plant component," and does BIS offer a specific list of such equipment?

The term “production,” as defined in § 772.1 of the EAR, includes equipment needed for any production stage, including testing. Parties producing items should assess the function of equipment in the production process to determine whether it is essential. BIS is not in a position to provide a list of equipment.

Is the definition of “plant” in the Entity List FDP rule limited to wafer foundries or outsourced semiconductor assembly and test facilities (OSATs)?

No. While wafers and semiconductors produced by the equipment described in § 734.9(e)(1)(ii) of the EAR are clearly covered by the FDP rule, § 734.9(e)(1)(ii) refers to any foreign-produced “item” produced with such equipment.

Aside from the savings clause, does the Entity List FDP rule require a license for the servicing or repair of an item lawfully exported prior to the implementation of the August 2020 FDP rule?

The FDP rule does not require a license for such transactions though parties need to review other provisions of the EAR to determine if a license is required for such transactions, such as a replacement part for equipment at a footnote 1 designated entity (see Supplement No. 4 to part 744 of the EAR).

Is a license needed for the wafer if no manufacturing process items, such as the wafer, finished integrated circuits, or higher-level assemblies, are sent to a footnote 1 designated entity, and all production is done by a non-footnote 1 designated entity?

Yes, it is possible that the wafer would be subject to a license requirement because it is a FDP that meets the criteria of §734.9(e) and a footnote 1 designated entity, while not the end user or ultimate consignee, is another party to the transaction, e.g., as a “purchaser,” “intermediate consignee,” or order party.

Would a wafer be subject to the EAR if the finished integrated circuit or a higher-level assembly incorporating the finished integrated circuit is exported from abroad, reexported or transferred to a footnote 1 designated entity?

If the wafer meets the criteria of § 734.9(e)(1) and the wafer maker has “knowledge” that a footnote 1 designated entity is a party to the transaction involving the finished integrated circuit or higher-level assembly incorporating such wafer, then a license is required to export from abroad the wafer to the integrated circuit manufacturer. Either the wafer maker or the integrated circuit manufacturer may apply for the license, see Q17 through Q21 below.

Does the Entity List FDP rule capture foreign-produced EAR99 items that are a direct product of non- U.S.-origin technology or software that is not subject to the EAR?

Such a foreign-produced item could be within the scope of § 734.9(e)(ii), which applies to items “produced by” equipment described in that paragraph. Thus, if the equipment (which includes testing equipment) covered by § 734.9(e)(ii) is used to produce the foreign-produced item, such an item is covered.

Did the licensing review policy for items that meet the criteria of the Entity List FDP rule change?

Yes, the August 2020 rule changed the licensing review policy. License applications for foreign-produced items subject to the EAR under § 734.9(e) that are capable of supporting the “development” or “production” of telecom systems, equipment and devices at only below the 5G level (e.g., 4G, 3G, etc.) will be reviewed on a case-by-case basis (see § 744.11(a)(2) of the EAR). All other license applications will be reviewed using the license review policy in the license requirement column of the Entity List for each footnote 1-designated entity, which is presumption of denial.
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