Foundry
parts, and materials. As a VEU, SMIC
can receive and use approved U.S.
equipment and materials from any U.S.
vendor without the delays and costs
associated with traditional export
licensing. Moreover, this authorization
applies to all facilities and technology
nodes included in SMIC’s VEU
application, and has no expiration date.
Ensuring IP Protection
China’s accession to the World Trade
Organization (WTO) has sparked both
domestic and international discussions
regarding the protection and
enforcement of intellectual property
rights in China. Since joining the WTO
on December 11, 2001, the Chinese
government has adopted measures to
strengthen its legal infrastructure and
amend its intellectual property-related
22
laws and regulations to comply with the
mandates specified in the Agreement
www
on Trade-Related Aspects of Intellectual
.eur Property Rights (TRIPs) set forth by the
oasiasemiconductor
and technology have concerns users in certain countries. Similar WTO. With the adoption of decree
regarding the sale and transfer of these licensing restrictions exist in other number 300 by the Chinese State
items to those who may seek to abuse Wassenaar member countries. Council, IP protection rights now
this technology. Consequently, SMIC The length of time required to extend to integrated circuit layout
has implemented an internal receive export licenses for designs, meaning intellectual property
compliance program to screen all of its manufacturing equipment varies from right holders may legally bar others
.com
customers and transactions, especially country to country. While it typically (who do not have permission) from
with respect to the eventual end-use takes a few weeks to obtain purchase reproducing layout designs (in part or
and potential end-users. licenses from Europe or Japan, it can whole) and commercial usage of either
square4
Issue VII 2009
SMIC purchases most of its take up to six months to receive similar ICs containing these designs or
manufacturing equipment from Europe, licenses from the United States. To products containing these ICs.
Japan, and the United States; members ensure the greatest speed and SMIC’s IP protection policies are
of the Wassenaar Arrangement on reliability in obtaining U.S. licenses, core to its corporate culture and SMIC
export controls. The Wassenaar SMIC developed a strong internal places great emphasis on protecting
Arrangement designates certain “dual- program for complying with U.S. law, and preserving the confidentiality of
use” items that are commercial in and the U.S. government has customers’ intellectual property. In
nature but could be used for military or responded accordingly. Starting in particular, database and reticle security
proliferation purposes. Member 2002, SMIC became an approved end- is a top priority for SMIC. SMIC also
countries enact laws that limit or user (consignee) on “special cultivates an open and transparent
control the flow of these “dual-use” comprehensive licenses” (SCLs), giving relationship with customers by
items. For instance, the United States SMIC bulk approval to import certain welcoming audits of its manufacturing
licenses the sale and transfer of U.S. semiconductor equipment and parts facilities. SMIC protects customers’
origin equipment, technology, and from its largest U.S. equipment intellectual property through a
materials, and requires the exporters suppliers. In 2007, SMIC became one combination of internal policies and
and importers of such items to take of the first five “validated end-users” systems such as legal agreements, IT
measures to prevent certain end-use (VEUs) in the world, treating SMIC as a security measures, mask shop reticle
applications or access by certain end- trusted customer of U.S. equipment, protection procedures, and audits, etc.
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