US Government Launches New Tech Supply Chain Investigation
The U.S. government has initiated new investigations into the supply chains for certain power converters, circuit board assemblies, and computing systems. This action represents continued scrutiny under U.S. export control and trade policies, which have been noted to have a chilling effect on international standards participation.
- This investigation was initiated by the U.S. International Trade Commission (USITC) under Section 337 of the Tariff Act of 1930, following a complaint filed by Vicor Corporation of Andover, Massachusetts. The complaint alleges patent infringement related to power converters and other components used in data center servers and AI computing systems. - The respondents named in the investigation include prominent technology companies from Taiwan, China, and the United States, such as Delta Electronics, Luxshare Precision Industry, Monolithic Power Systems, Wistron Corporation, and Quanta Computer. - Vicor Corporation is requesting that the USITC issue a limited exclusion order and cease and desist orders, which would bar the importation and sale of the allegedly infringing products in the U.S. - This type of investigation, known as a Section 337 investigation, is a quasi-judicial process to determine if there is unfair competition in the importation of products. These investigations are known for their expedited timelines, typically reaching a final determination within 15 to 18 months, which is significantly faster than district court litigation. - The number of new Section 337 investigations saw a 41% increase in 2024 compared to 2023, with 77% of these cases being patent-related. The most frequently litigated sectors include consumer electronics, telecommunications, and semiconductors. - This action occurs amidst a broader trend of "technological decoupling" between the U.S. and China, where national security concerns are increasingly influencing trade and technology policies. Both nations have expanded export controls and measures to secure technology supply chains. - The U.S. Bureau of Industry and Security (BIS) recently amended export control regulations to make it easier for U.S. companies to participate in international standards-setting bodies without fear of violating export controls, a move intended to counter the "chilling effect" of previous restrictions. This was a direct response to industry concerns that rules targeting companies like Huawei were impeding U.S. involvement in crucial standards development. - Export controls, traditionally a national security tool to prevent the proliferation of weapons and dual-use technologies, are now being used more broadly as an instrument of trade policy, which can create uncertainty for the private sector and impact international collaboration.
