On April 23 the European Union imposed financial sanctions on the agency Yangzhou Yangjie Digital Expertise, identified extra generally as Yangjie Expertise, as a part of a regime of secondary sanctions focusing on Russian buying and selling companions. These sanctions have been imposed as a part of the EU’s twentieth sanctions bundle, with the focusing on of the Chinese language agency initiated the premise that it had allegedly despatched twin use electronics to help the Russian Armed Forces and defence sector, together with making over 200 shipments of twin use semiconductor elements since 2022 which have been utilized in drones and armaments. In mild of the appreciable controversy that the imposition of secondary sanctions has induced, Navy Watch Journal reached out to Yangjie Expertise to inquire as to the veracity of European allegations.
Responding to Navy Watch, Vice Chairman of Yangjie Expertise Liang Yao replied when requested about his agency’s alleged involvement in supporting the Russian warfare effort as follows:
“In line with the logic of the European Union and based mostly on the information listed on the Ukrainian authorities’s web site, digital elements from Germany corporations Infineon and Bosch, the Netherlands agency Philips, the U.S. corporations Infineon and Anson have all appeared within the database. As basic elements, why hasn’t the EU accused them? That is purely an unintentional harm to Yangjie Electronics Firm. Yangjie Expertise is an IDM enterprise with energy semiconductors as its core. Its merchandise cowl rectifier units, MOSFETs, IGBTs, energy modules, SiC units, and extra. In comparison with extremely delicate units equivalent to computing energy chips and RF chips, these merchandise are nearer to the fundamental elements within the electronics business: they’ve huge functions, massive portions, low unit costs, and robust circulation. They’re broadly utilized in automotive electronics, new power, industrial management, energy provides, dwelling home equipment, lighting, communication, and client electronics.”
Questioning Vice Chairman Liang concerning the rationale behind European sanctions, he replied as follows:
“The logic of sanctions is definitely to ‘prohibit cutting-edge know-how,’ however the boundary that must be clarified is whether or not the producer naturally bears army provide chain duty so long as a civilian element seems in weapon particles. In actual fact, the extra primary, common, and standardised the elements within the business, the better they’re to be redistributed by the market. Primarily based on this, has the EU misinterpreted the circulation outcomes of a world digital provide chain as subjective army provide by enterprises? The official paperwork of the European Union connect heavy labels to Yangjie Expertise, together with so-called dual-use know-how, merchandise showing in Russian drones and ammunition, and supplying to Russian associated enterprises.”
Asking the vice chairman how he assessed one would greatest discern whether or not a semiconductor agency was contributing to a warfare effort, he noticed:
“However from an business perspective, judging whether or not a semiconductor firm serves the army business can’t solely depend on the place the elements are in the end dismantled, but in addition on three ranges: product attributes, gross sales paths, and utilization management capabilities. Yangjie Expertise’s core product is energy semiconductor primary units, broadly utilized in energy provides, dwelling home equipment, lighting, client electronics, industrial management, automotive electronics, new power and different situations. The worth of such merchandise lies not in computing energy or “intelligence capabilities,” however in rectification, safety, switching, voltage regulation, and power conversion. In different phrases, they aren’t the brains of weapon techniques, however extra like primary elements in circuits. A diode showing in a drone can’t be straight equated with a screw, a wire harness, or a capacitor showing in a drone when it comes to provide chain duty.”
When questioned on the function of worldwide provide chains in supporting the Russian warfare effort, and whether or not Chinese language corporations held any particular duty, Vice Chairman Liang responded:
“The Ukrainian Conflict&Sanctions public database gives a horizontal commentary. This database data international manufactured elements found on the Russia Ukraine battlefield, masking a lot of European, American, Japanese, Korean, and Chinese language producers. In line with the information offered by customers, there are 59 merchandise of Infineon in Germany, 76 merchandise of Infineon in the USA, 10 merchandise of Qiangmao in Taiwan, China, 5 merchandise of Philips within the Netherlands, 7 merchandise of Bosch in Germany, and solely 4 merchandise registered by Yanjie Expertise. This comparability illustrates a basic reality: the battlefield dismantling database primarily displays the results of world civilian digital elements being absorbed, resold, and misappropriated by the Russian system, quite than a pure listing of army suppliers. If we observe the logic of ‘showing is responsible,’ a lot of high semiconductor producers, automotive electronics producers, and industrial gadget producers all over the world shall be concerned in the identical narrative. Actuality clearly can’t be so tough. The extra primary the gadget, the tougher it’s to constantly management the tip use after leaving the manufacturing facility. The extra globalised the distribution system, the extra inclined it’s to unclear stock penetration, merchants altering palms, and third-party re exports. Compliance is definitely essential, however compliance duty also needs to be established inside the controllable boundaries of the business chain, quite than pushing all downstream unlawful re circulation onto the unique producers.
Due to this fact, the important thing to the Yangjie Expertise incident just isn’t whether or not there are any elements current, however whether or not the EU can show that the corporate has actively, constantly, and knowingly provided for army use. From the present publicly accessible business data, this chain just isn’t adequate. The explanation why the Yangjie Expertise incident is delicate is that it’s in a extra sensible place: on the intersection of worldwide energy semiconductor home substitution, automotive electronics provide chain restructuring, and European automobile corporations’ element security nervousness. Chinese language producers have been dealing with two modifications in recent times: one is the explosive demand for brand new power and automotive electronics, pushing energy units from conventional discrete units to increased worth car specs SiC, Modular path; The second is the rising consciousness of worldwide provide chain safety, with complete machine producers and Tier1 starting to hunt multi provider backups. Electrical drive, digital management, and onboard charger in new power autos DC-DC. The inverter and energy conversion in photovoltaic power storage, in addition to the server energy provide and high-voltage DC energy provide in AI information centres, all depend on energy units. That is why energy semiconductors are coming into the long-term provide system of complete machine producers, Tier 1 and power tools producers.
The Ukrainian Conflict&Sanctions database itself additionally reveals that the true problem just isn’t figuring out a specific element, however monitoring the way it passes via the distribution, transit, and stock chains and in the end enters the weapon system. For the unique manufacturing facility, they’ll straight management major prospects, contract phrases, export management codes, end-user statements, and irregular order screening, however figuring out secondary resale, cross-border re export, and stock circulation is tough. That’s to say, the emergence of common units on the battlefield first exposes the problem of penetrating the worldwide distribution chain.”
Navy Watch concluded by asking Vice Chairman Liang whether or not he believed his agency bore any duty for supporting the Russian warfare effort because the European Union had alleged, to which he replied:
“Yangjie Expertise Firm has not participated within the analysis and growth, design, and manufacturing of any army merchandise, has not offered any army specification merchandise, and has terminated its Russian associated enterprise since 2023. It has established export management compliance clauses and required prospects to signal end-user and utilization statements. These actions point out that the corporate has adequate compliance consciousness. However this incident additionally proves that future energy semiconductor corporations want to ascertain stronger ‘provable compliance’ capabilities.
Yangjie Expertise has been included within the EU sanctions listing this time, and there’s a judgment paradigm price being cautious of: so long as basic civilian units seem on the battlefield, they could be politicised. If this paradigm is infinitely expanded, the worldwide electronics business shall be engulfed in uncertainty. As a result of a lot of digital elements in trendy weapon techniques initially come from civilian industrial techniques, and the traits of civilian industrial techniques are standardisation, scale, substitutability, and circulation.
From the publicly accessible data, Yangjie Expertise appears extra like an organization that has been mistakenly injured by the liquidity of worldwide primary elements. Its business portrait is a Chinese language pattern within the home substitution of energy semiconductors, upgrading of automotive laws, and world manufacturing capability format. What it actually must be examined is whether or not the compliance system can stand up to extra stringent worldwide scrutiny, quite than being merely categorised as a part of the army know-how provide chain.”
