Recent updates to U.S. export control rules present significant challenges for Israeli startup companies aiming to manufacture semiconductor chips on advanced nodes. These rules target logic chips produced using processes at 16nm/14nm nodes and smaller and impose stringent restrictions that will complicate the ability of Israeli companies to design and manufacture chips on such advanced nodes. To navigate these challenges, Israeli companies must proactively collaborate with fabs and outsourced semiconductor assembly and test (OSAT) vendors. Early engagement is crucial to developing robust compliance strategies and ensuring access to advanced-node technologies.
Why Advanced Nodes Matter and Why They Are Impacted
Advanced nodes refer to the most sophisticated semiconductor manufacturing processes, where the size of the transistors on the chip—measured in nanometers (nm)—determines the chip’s performance and efficiency. Nodes below 16nm/14nm are considered advanced.
These logic chips are critical for high-performance computing, artificial intelligence (AI), and advanced technologies like autonomous vehicles. They enable faster processing, greater energy efficiency, and enhanced capabilities for applications ranging from cloud computing to defense technologies. Access to these nodes is essential for maintaining competitiveness in global markets.
New U.S. regulations impose strict controls on exporting logic chips manufactured on these nodes to countries like Israel. The rules include presumptions regarding performance and transistor counts, placing nearly all advanced-node chips under regulatory scrutiny. Leading fabs, such as TSMC and Samsung, will become gatekeepers for these restrictions, making it difficult for them to export chips on these nodes to Israel, which is excluded from streamlined access afforded to certain other U.S. allies.
Recommendations
Israeli companies should promptly engage with fabs and outsourced semiconductor assembly and test (OSAT) vendors to proactively address the requirements of the new regulations. Early discussions can help identify potential obstacles, explore viable compliance pathways, and work towards securing uninterrupted access to advanced-node technologies. However, it is important to recognize that communication alone may not resolve all compliance challenges. In some cases, additional corporate restructuring or strategic adjustments may be necessary to overcome regulatory hurdles effectively.
Conclusion
The new export control rules significantly impact Israeli startups’ ability to manufacture chips on advanced nodes. The regulations include presumptions that capture nearly all advanced-node manufacturing. These restrictions on leading fabs like TSMC create hurdles that will require careful navigation. By understanding the affected nodes and adopting proactive strategies, Israeli companies can mitigate the challenges and maintain their innovation edge.
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