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Businessmen Smuggles Military Chips to China, Gets Five Years

(Image credit: HRL)

Los Angeles-based scientist Yi-Chi Shih, 66, has been sentenced to more than five years (63 months) in prison for transferring sensitive technology to the Chinese government. The sentence comes after Shih was convicted in 2019 of illegally obtaining  monolithic microwave integrated circuits (MMICs) and selling them to a state-owned entity in China. Shih was also ordered to pay both $362,000 in restitution to the IRS and a $300,000 fine.

In civil applications, MMICs are used for microwave mixing, power amplification, and high-frequency switching. But militaries can use MMICs in missiles, missile guidance systems, fighter jets, electronic warfare and countermeasures as well as radar applications. These chips cannot be exported without a special license in accordance with the International Emergency Economic Powers Act (IEEPA) and the U.S. Export Administration Regulations (EAR). 

Yi-Chi Shih was the President of Chengdu GaStone Technology Company (CGTC), a company that was building a a MMIC manufacturing facility in Chengdu, China, according to the U.S. Department of Justice. But developing MMICs and building a fab is both expensive and time consuming (yet there are many companies that produce GaN-based MMICs), so Shih and his accomplices had a Plan B in place: acquire MMICs from a U.S.-based company and illegally export them to China. 

To do so, Shih established Pullman Lane Productions, LLC, in Hollywood Hills, California. The company was funded from China. With some help from an associate, Shih gained access to one of the U.S.-based MMIC supplier's customer portal, posed as a domestic customer, and bought MMICs claiming that he intended to use the chips only in the U.S. Instead, he exported them to China and sold to AVIC 607, a state-owned entity. 

In 2014, CGTC was included on the Commerce Department’s Entity List 'due to its involvement in activities contrary to the national security and foreign policy interest of the United States' as CGTC illegally procured commodities and items for end use by the Chinese military.