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U.S.-based chip-tech group moving to Switzerland over trade curb fears [oann.com]

FILE PHOTO: Technology on display at Huawei's headquarters in Shenzhen, Guangdong province, China May 29, 2019. REUTERS/Jason Lee

November 25, 2019

By Stephen Nellis and Alexandra Alper

SAN FRANCISCO/WASHINGTON (Reuters) – A U.S.-based foundation overseeing promising semiconductor technology developed with Pentagon support will soon move to Switzerland after several of the group’s foreign members raised concerns about potential U.S. trade curbs.

The nonprofit RISC-V Foundation (pronounced risk-five) wants to ensure that universities, governments and companies outside the United States can help develop its open-source technology, its Chief Executive Calista Redmond said in an interview with Reuters.

She said the foundation’s global collaboration has faced no restrictions to date but members are “concerned about possible geopolitical disruption.”

“From around the world, we’ve heard that ‘If the incorporation was not in the U.S., we would be a lot more comfortable’,” she said. Redmond said the foundation’s board of directors approved the move unanimously but declined to disclose which members prompted it.

Created in 2015, the RISC-V Foundation sets standards for the core chip architecture and controls who can use the RISC-V trademark on products, as other organizations do for Wi-Fi and Bluetooth chips. It does not own or control the technology.

More than 325 companies or other entities pay to be members, including U.S. and European chip suppliers such as Qualcomm Inc <QCOM.O> and NXP Semiconductors <NXPI.O>, as well as China’s Alibaba Group Holding Ltd <BABA.N> and Huawei Technologies Co Ltd [HWT.UL].

The foundation’s move from Delaware to Switzerland may foreshadow further technology flight because of U.S. restrictions on dealing with some Chinese technology companies, said William Reinsch, who was undersecretary of commerce for export administration in the Clinton administration.

“There is a message for the government. The message is, if you clamp down on things too tightly this is what is going to happen. In a global supply chain world, companies have choices, and one choice is to go overseas,” he said.

In a statement to Reuters, the U.S. Department of Commerce said its controls were designed to safeguard U.S. national security and to “ensure bad actors cannot acquire technology that harms U.S. citizens or interests, while promoting innovation to fuel continued American technological leadership.” The department said it meets regularly with private industry to gauge market conditions and the effects of its regulations.

Some Republican U.S. lawmakers said they are concerned the United States will lose influence over RISC-V chip architecture, which can be used to make microprocessors for almost every type of electronic device, making it a crucial building block of a modern economy. The technology came from labs at the University of California, Berkeley, and later benefited from funding by the Pentagon’s Defense Advanced Research Projects Agency (DARPA).

The lawmakers warn that the foundation’s Chinese members could influence the technology’s development to help China’s semiconductor industry.

“The Chinese Communist Party is trying to circumvent our export control system to support national security threats like Huawei – we cannot let it succeed,” Representative Mike Gallagher, a Republican from Wisconsin, told Reuters.

Arkansas Republican Senator Tom Cotton said moving the foundation to ensure it could retain Chinese members was “short-sighted at best.” He added that “if American public funds were used to develop the technology, it’s also completely outrageous.”

Redmond said in follow-up emails after speaking to Reuters that given the technology is open source and available to anyone, she does not see how the move could be against the U.S. national interest.

A DARPA spokesman told Reuters the agency intended for RISC-V work it funded to be publicly available to companies and academics around the world.

Morgan Reed, president of The App Association, which represents major U.S. technology firms such as Apple Inc <AAPL.O> and Microsoft Corp <MSFT.O> in Washington, likened the RISC-V Foundation’s work to efforts between U.S. and Chinese companies to jointly develop Wi-Fi chip standards.

“The notion that China can be barred from participating in standards alongside the U.S. and the EU is simply not viable,” Reed said. “China is too important as a manufacturer and an end-market to ignore.”

INSURANCE POLICY

The RISC-V Foundation announced at a meeting last December it would seek a “neutral” country before making a formal decision to go to Switzerland earlier this year, a decision that got little public attention. Final approvals in Switzerland for the move are expected as soon as the end of November, Redmond said.

Chinese companies have had access to the RISC-V architecture, which is publicly available, since its creation, Redmond said.

Alibaba claimed in July it had developed the fastest RISC-V processor to date. The company declined to comment for this story.

The RISC-V Foundation’s move shows how U.S.-China trade tensions could make the United States a harder place to host technology standards groups, according to two attorneys who represent such groups.

The lawyers said it is unclear whether standards groups are allowed to work with Huawei. These groups are concerned U.S. authorities may decide that some closed-door technical discussions involve the transfer of sensitive technology to the Chinese or others on banned lists, said one of the attorneys, Brad Biddle, who works for several standards groups.

In June, more than two dozen standards groups – including those overseeing SD memory cards and Ethernet and HDMI cables – wrote a letter to U.S. Commerce Secretary Wilbur Ross asking for clarification of the rules on working with Huawei.

The groups warned Ross that the Huawei restrictions posed a “serious risk” that standards work could move out of the United States, which could end a long-held trend where U.S.-based groups set de facto standards for the rest of the world, they wrote.

The Commerce Department published an advisory opinion seeking to clarify the issue in August, but standards lawyers said the rules remain confusing.

The RISC-V Foundation’s Redmond does not yet see a “credible threat” to international collaboration. “But we’re taking out an insurance policy against that type of action by moving our incorporation,” she told Reuters.

HUAWEI SUPPORTS MOVE

The board’s seven current members are all based in North America. After the move, the foundation’s board will be expanded and European and Asian members will be added, said Redmond. Reuters could not confirm whether any Chinese companies planned to join the board.

Andrew Updegrove, an attorney who does work for standards groups, said that U.S. restrictions on transferring U.S.-origin technology to Chinese companies will still apply regardless of where the RISC-V Foundation is headquartered.

At Netherlands-based NXP Semiconductors, which is a member of the foundation, customers have asked the company to detail where the technology in its chips comes from, said Lars Reger, its chief technology officer. The customers do not want to be cut off in future trade disputes, he said.

U.S. officials and some lawmakers have alleged Huawei’s telecom equipment may enable surveillance by China. The resulting backlash has prevented it from making inroads into the U.S. market. Huawei has denied the claims.

In response to Reuters questions, a Huawei spokesman said: “We support RISC-V Foundation identifying Switzerland as a neutral venue for open source development. Making open source as open as possible is important for the industry.”

He said that RISC-V “might fit well into Huawei’s vision of this heterogeneous, open world.”

(Reporting by Stephen Nellis in San Francisco and Alexandra Alper in Washington; Additional reporting by David Shepardson; Editing by Martin Howell and Bill Rigby)

Original Submission