Daily Archives: January 9, 2025

How Ramesh Kasarla revolutionized the tech world

Photo courtesy of Ramesh Kasarla
Opinions expressed by Digital Journal contributors are their own.

Ramesh Kasarla is an innovator and disruptor in the tech world whose work has had a massive impact on the industry at large. Born into a humble farming family in a small village in India, Ramesh’s journey highlights his resilience, ambition, and pursuit of excellence. Throughout his upbringing, education was not a given but a hard-fought privilege. He attended schools where fees had to be paid despite limited income, which resulted in him developing a sense of responsibility and commitment. During these early years, he cultivated a passion for learning, particularly in mathematics and problem-solving, which would later form the foundation of his career in engineering.

Education

Through his dedication to his education and the unwavering support of his family, Ramesh earned a place in a prestigious engineering college in Hyderabad. This admission and subsequent education served as a profound turning point in his life and career. Here, he gained technical skills and the confidence to dream bigger and push boundaries. 

Ramesh’s final project during his time at Drexel University titled “Predicting Stock Closing Price Using Supervised Learning Techniques” discusses stock price prediction using machine learning techniques. In his research, he explored various regression models, from simple Linear Regression to advanced techniques like Random Forest Regressor and Long Short-term Memory (LSTM) networks, alongside an evaluation of simpler regression methods, which provided valuable insights into balancing model complexity with performance. This innovative approach not only emphasized his deep technical expertise but also demonstrated his unique ability to address practical challenges in predictive analytics.

Building a career: From India to the United States

After graduating, Ramesh took on roles in software development that allowed him to hone his skills in Java web applications, REST APIs, and financial systems automation. His reputation as a problem-solver grew, earning him acclaim, accolades, and the trust of his peers.

With his growing expertise, he transitioned into software architecture, taking on challenging projects that required designing scalable systems, implementing secure solutions, and leading teams. Ramesh’s work in microservices architecture enabled an e-commerce platform to handle over a million transactions daily without downtime during peak seasons. By leveraging API Gateway and service discovery techniques, he ensured seamless service communication, setting benchmarks for operational efficiency.

“My journey into the software architecture domain and the tech industry is inspired by a blend of personal aspirations, professional passion, and the desire to achieve excellence. It’s a story of turning dreams into reality through dedication, skill, and a vision for long-term impact,” Ramesh says.

Achievements

Throughout his storied career, Ramesh has achieved excellence in many fields. Here are some of his greatest professional accomplishments:

End-to-end development of scalable Java web applicationsHe designed and developed multiple Java-based web applications using Spring Boot and Hibernate, improving scalability and reducing development cycles by 30%. This spearheaded the migration of monolithic systems to microservices, enabling modularity and faster feature deployments.

Pioneering microservices architectureArchitected a robust microservices framework for a high-traffic e-commerce platform, integrating secure OAuth 2.0 authentication and reducing vulnerabilities by 70%.

Advanced REST API securityHe developed robust authentication and authorization mechanisms using OAuth 2.0 and JWT tokens, ensuring high security for APIs handling sensitive user data. This included conducting security audits to ensure APIs met OWASP standards, reducing vulnerabilities by 70%.

Machine learning for predictive analyticsApplied machine learning algorithms, achieving a 90% accuracy rate in loan default predictions, demonstrating his ability to integrate AI-driven solutions into live production systems.

Ramesh’s technical accomplishments not only underscore his specialized focus but also show the impact of his work on modern software architecture and predictive analytics.

Earning awards and recognition

Ramesh was named “Innovator of the Year” for designing a cost-effective microservices solution for a multinational retail chain. He was also awarded the “AWS Certified Solutions Architect – Professional” for excellence in cloud-native solutions. Furthermore, he was recognized as a top performer in delivering secure and efficient REST API architectures.

From modest beginnings to shaking up the status quo of the tech world, Ramesh Kasarla’s tale is inspirational and aspirational, showing that nothing will carry you as far as passion and drive. Ramesh’s unbridled desire to make a difference in the fields he has operated in has served him well, making him an international success and earning him a great deal of acclaim.

New Rules Further Restrict China’s Access to Semiconductor Technology

On December 2, 2024, the U.S. Department of Commerce Bureau of Industry and Security (“BIS”) issued two new rules further restricting China’s capability to produce advanced semiconductors. One final rule (the “Entity List Updates Rule”) adds 140 entities to the BIS Entity List and assigns 16 entities the new Footnote 5 designation. Concurrently, an interim final rule makes several changes to the Export Administration Regulations (“EAR”), including adding new Foreign Direct Product (“FDP”) rules, adding or modifying several Export Control Classification Numbers (“ECCNs”) on the Commerce Control List (“CCL”), adding new license exceptions, and other revisions.

Interested parties may submit public comments to the interim final rule no later than January 31, 2025.

Entity List Updates

The Entity List Updates Rule added 140 entities to the BIS Entity List. Most of the newly added entities are Chinese entities, but Japanese, South Korean, and Singaporean companies were also added to the Entity List.  The Entity List Updates Rule also modifies 14 existing Chinese entities on the Entity List.

According to BIS, it added or modified these entities for being “involved with the development and production of ‘advanced-node integrated circuits’ and/or semiconductor manufacturing items, and/or have supported the Chinese government’s Military-Civil Fusion  Development Strategy.” The EAR’s definition of “advanced-node integrated circuits” was modified by the concurrent interim final rule discussed below.

Additionally, nine of the newly added entities and seven of the modified entities have been given the new Footnote 5 designation related to a new FDP rule, discussed in further detail below.

Foreign Direct Product Interim Final Rule

The concurrently published interim final rule contains several revisions to the EAR related to advanced computing items and semiconductor manufacturing equipment under the lengthy title of “Foreign-Produced Direct Product Rule Additions, and Refinements to Controls for Advanced Computing and Semiconductor Manufacturing Items” (“FDP IFR”). The lengthy title complements the lengthy FDP IFR, which also consists of multiple changes in addition to those related to the new FDP rules. Various aspects of the FDP IFR are discussed briefly below.

New FDP Rules

The FDP IFR adds two new FDP rules, both related to advanced computing and semiconductor manufacturing equipment. The FDP rules of the EAR apply to foreign-made products, including those without any U.S.-origin content, that are the “direct product” of U.S.-origin software, technology, plants, or major components of a plant (i.e., equipment essential for production). Under the EAR, a “direct product,” is defined as “the immediate product (including processes and services) produced directly by the use of technology or software.”

Footnote 5 FDP Rule

The FDP IFR adds the Entity List FDP rule: Footnote 5 as 15 C.F.R. § 734.9(e)(3) of the EAR (“Footnote 5 FDP Rule”). Like the other Entity List FDP rules that BIS added over the past few years, the Footnote 5 FDP Rule’s end-user scope is triggered when there is involvement of a specially designated Entity Listed party, specifically where there is knowledge that:

The foreign-produced commodity will be incorporated into any part, component, or equipment produced, purchased, or ordered by any Entity Listed entity with a Footnote 5 designation; or
Any Entity Listed entity with a Footnote 5 designation is a party to any transaction involving the foreign-produced commodity (e.g., as a purchaser, intermediate consignee, ultimate consignee, or end-user).

The product scope of the Footnote 5 FDP Rule applies to foreign-produced commodities that are:

Described in specified Category 3 ECCNs: 3B001 (except 3B001.a.4, c, d, f.1, f.5, g, h, k to n, p.2, p.4, r), 3B002 (except 3B002.c), 3B903, 3B991 (except 3B991.b.2.a through 3B991.b.2.b), 3B992, 3B993, or 3B994; and
Meet one of the following conditions:

The direct product of U.S.-origin technology or software described in specific Category 3 ECCNs; or
Is either:

Produced by any complete plant or major component of a plant that is located outside the United States, when the complete plant or major component of a plant itself is a direct product of U.S.-origin technology or software that is specified in  certain Category 3 ECCNs; or
Contains a commodity produced by any complete plant or major component of a plant that is located outside the United States, when the complete plant or major component of a plant itself is a direct product of U.S.-origin technology or software that is specified in certain Category 3 ECCNs.

Semiconductor Manufacturing Equipment FDP Rule

The FDP IFR adds a second FDP rule to the EAR at 15 C.F.R. § 734.9(k): the Semiconductor Manufacturing Equipment FDP rule (“SME FDP Rule”). The destination scope of the SME FDP Rule is met when there is knowledge that the foreign-produced item is destined to Macau or a destination in Country Group D:5, which includes China and other U.S. arms embargoed countries.

The product scope of the SME FDP Rule applies to foreign-produced items specified in ECCNs 3B001.a.4, c, d, f.1, f.5, k to n, p.2, p.4, r, or 3B002.c that are:

The direct product of technology or software subject to the EAR and specified in 3D992 or 3E992; or
Meet one of the following conditions:

Is produced by any complete plant or major component of a plant that is located outside the United States, when the plant or major component of a plant itself is a direct product of U.S.-origin technology or software that is specified in certain Category 3 ECCNs; or
Contains a commodity produced by any complete plant or major component of a plant that is located outside the United States, when the complete plant or major component of a plant itself is a direct product of U.S.-origin “technology” or “software” that is specified in certain Category 3 ECCNs.

The FDP rules of the EAR are notoriously difficult to navigate and require companies often unfamiliar with U.S. export control laws to classify not only their foreign-produced item but also any U.S.-origin technology, software, or equipment used in the production of the foreign item. The two new FDP rules added by the FDP IFR will undoubtedly lead to additional compliance burdens for foreign companies participating in the semiconductor ecosystem.

Advanced-Node Integrated Circuit Definition

The FDP IFR revises the EAR definition of “advanced-node integrated circuit,” which impacts some of the new revisions from the FDP IFR. The revision relates to the definition of dynamic random access memory (“DRAM”) integrated circuits. The new definition provides that “advanced-node integrated circuits” are integrated circuits that meet any of the following criteria:

(1) Logic integrated circuits using a non-planar transistor architecture or with a production technology node of 16/14 nanometers or less;

(2) NOT AND (NAND) memory integrated circuits with 128 layers or more; or

(3) DRAM integrated circuits having:

(i) A memory cell area of less than 0.0019 µm; or

(ii) A memory density greater than 0.288 gigabits per square millimeter.

New and Modified ECCNs

The FDP IFR also adds certain ECCNs. The new ECCNs include:

3A090.c: High-Bandwidth Memory (“HBM”) having a memory bandwidth density greater than 2 gigabytes per second per square millimeter. BIS’s control of HBM is related to the use of HBM for advanced artificial intelligence (“AI”) models. These controls seek to slow China’s attempts to indigenize advanced AI chip production.

In addition to the new ECCN for specified HBM, the FDP IFR creates new License Exception HBM, which authorizes certain exports, reexports, and transfers (in-country) of certain HBM items controlled by ECCN 3A090.c where the terms of the license exception are met.

3B993: Specified semiconductor manufacturing equipment.
3B994: Semiconductor manufacturing equipment that enables “advanced-node integrated circuit” production.
3D992: Software for the development or production of commodities specified in 3B001.a.4, c, d, f.1, f.5, k to n, p.2, p.4, r, or 3B002.c and other specified software.
3D993: Software for the development or production of commodities specified in 3B993 and other specified software.
3D994: Software for the development or production of commodities specified in 3B994 and other specified software.
3E992: Technology for the production or development of commodities specified in 3B001.a.4, c, d, f.1, f.5, k to n, p.2, p.4, r; and 3B002.c
3E993: Technology for the development or production of commodities specified in 3B993.
3E994: Technology for the development or production of commodities specified in 3B994 and other specified technology.

Some of the new ECCNs control items previously not controlled on the CCL while others constitute a rearranging of other ECCNs. The FDP IFR also includes modifications to several ECCNs, including 3B001, 3B002, 3B991, 3B992, and 3D002. Companies involved in the semiconductor and advanced computing industries should review the new and revised ECCNs to determine if their products, software, or technology are now controlled on the CCL, have changed ECCNs, or are subject to new controls under the EAR.

New License Exception Restricted Fabrication Facility

The FDP IFR also adds new license exception Restricted Fabrication Facility (“RFF”), which allows certain items, including certain semiconductor manufacturing equipment, to be exported, reexported, exported from abroad, or transferred (in-country) to certain fabrication facilities that are subject to end user-based license requirements but that are not currently producing “advanced node integrated circuits.” License Exception RFF may allow fabrication facilities to obtain legacy equipment to produce non-“advanced-node integrated circuits.” License Exception RFF is only applicable to license requirements for specific Entity Listed entities and does not overcome destination-based license requirements or end-use based license requirements.

New Red Flags

The EAR contains “Know Your Customer” Guidance and Red Flags in supplement no. 3 to part 732. The FDP IFR adds eight new red flags to assist exporters, reexporters, and transferors. Some of the new Red Flags 20 through 27 specifically relate to semiconductor manufacturing equipment (i.e., Red Flags 20, 21, 26, and 27), while others have more universal application (i.e., Red Flags 22 through 25).

* * *

These new rules demonstrate the U.S. Government’s continued position of restricting China’s ability to advance its domestic semiconductor industry. With respect to the Entity List Updates Rule, the revisions should serve as a reminder for exporters and reexporters to continue to conduct denied party screening of all parties to transactions, even where a previous business relationship exists. “One and done” screening is never advisable but poses a particular risk in the dynamic compliance environment of the semiconductor industry.

The FDP IFR is both a regulatorily complex and highly technical rule. The above brief description contains only a portion of the numerous revisions described in the 41-page rule. 

A Primer on the Committee on Foreign Investment in the United States (CFIUS)

The Committee on Foreign Investment in the United States (“CFIUS” or “the Committee) is an interagency body of the U.S. government that plays a critical role in safeguarding national security by reviewing foreign investments in U.S. businesses and assets. Established in 1975 through an Executive Order issued by President Gerald Ford, CFIUS initially served as an advisory committee to monitor and evaluate the impact of foreign investments on the U.S. economy. Over time, its role has evolved significantly to focus on identifying and mitigating risks to national security posed by such investments.

Structure and Composition

CFIUS is chaired by the Secretary of the Treasury and includes representatives from several key federal departments and agencies, including the Departments of Defense, Homeland Security, State, Justice, and Commerce, as well as the Office of the U.S. Trade Representative (“USTR”). Additional agencies may participate in the Committee’s activities when issues within their jurisdiction are implicated. The diverse composition of the Committee allows CFIUS to evaluate foreign investments from multiple perspectives, ensuring a comprehensive assessment of potential national security risks.

Legislative Framework

CFIUS’s authority and responsibilities are grounded in several pieces of legislation, most notably the Defense Production Act of 1950, as amended, and the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA). FIRRMA’s enactment carried out several important developments to modify CFIUS procedures, expand the Committee’s authority to review transactions involving foreign investments, and enhance the Committee’s ability to address evolving national security threats

Prior to 2018, CFIUS generally only had the authority to review foreign investment transactions that resulted in a foreign party gaining control of a U.S. business. However, FIRRMA expanded CFIUS’s jurisdiction by providing the Committee with the authority to review certain non-controlling foreign investments when a transaction involves a “TID” U.S. business (i.e., a business related to critical Technologies, critical Infrastructure, or sensitive personal Data). Importantly, transactions involving foreign investment in a TID U.S. business may now also trigger a requirement that the involved parties submit a mandatory notification of the transaction to CFIUS for review.

Before FIRRMA, notifications of a transaction to CFIUS were strictly voluntary. Now however those involved in cross-border deals must assess whether a subject transaction may trigger mandatory filing requirements under CFIUS regulations. Failure to notify CFIUS of a transaction that has triggered a mandatory filing requirement (i.e., submission of a notification of the transaction to CFIUS) may result in the assessment of penalties against the involved parties and action by CFIUS to review and mitigate national security concerns presented by the transaction even after closing.

One other key aspect of CFIUS’s expanded authority under FIRRMA is the Committee’s ability to review certain foreign investments in or acquisitions of U.S. real estate. While real estate transactions are not subject to mandatory filing requirements (i.e., parties may notify CFIUS of these transactions on a voluntary basis), CFIUS now maintains the authority to review transactions where foreign parties acquire certain property rights in real estate that is located near sensitive government facilities and military installations. This review authority ultimately furthers CFIUS’s agenda of protecting U.S. national security interests by aiding in the prevention of illicit access or surveillance of sensitive government sites by foreign adversaries.

Review Process

The CFIUS review process begins when parties to a subject transaction notify the Committee or when CFIUS initiates a review on its own. The process involves several stages:

Filing and Initial Review: Parties to a transaction submit a notification to CFIUS, providing detailed information about the transaction, the foreign investor, and the U.S. business. CFIUS conducts an initial 45-day review to determine whether the transaction poses any national security risks.
Investigation: If potential risks are identified, CFIUS may conduct an additional 45-day investigation to gather more information and assess whether mitigation measures are necessary.
Presidential Action: If the Committee determines that national security concerns cannot be resolved through mitigation, it may refer the transaction to the President for a final decision. The President has the authority to block or unwind transactions that threaten national security.

Key Considerations and Trends

CFIUS evaluates transactions based on a range of factors, including the nature of the U.S. business, the identity and intentions of the foreign investor, and the potential implications for U.S. national security. Specific areas of concern include:

Critical Technologies: Investments that may provide foreign entities access to technologies critical to U.S. national defense or economic security.
Infrastructure and Supply Chains: Transactions involving critical infrastructure, such as telecommunications or energy, and supply chains essential to national security.
Data Security: Investments that could result in foreign access to sensitive personal data of U.S. citizens.
Regions of Special Concern: Transactions involving a foreign investor from certain countries of current concern, such as China and Russia, may generate increased scrutiny by CFIUS.

The increasing complexity of global supply chains and the rapid pace of technological innovation have heightened the importance of CFIUS’s work. The Committee has become particularly vigilant regarding investments from countries perceived as strategic competitors, such as China, which has sought to acquire U.S. companies within certain industries such as semiconductors, artificial intelligence, and biotechnology. CFIUS is also increasingly vigilant in its review of real estate transactions involving the acquisition of property by a foreign investor when the target property is located within close proximity to sensitive military or government sites in the U.S.

CFIUS has faced criticism for its opaque processes and the potential for decisions to be influenced by political considerations and foreign policy objectives. Importantly, those involved in cross-border deals may need to engage CFIUS counsel to help assess CFIUS compliance risks presented by a subject transaction. Legal counsel can also assist with consideration of potential outcomes of a CFIUS review in light of current foreign policy trends, U.S. export control developments (as businesses involved in the production of certain advanced technologies may trigger mandatory filing requirements and increased scrutiny), and prior actions taken by CFIUS.

Conclusion

CFIUS continues to play a vital role in the nation’s defense against security threats posed by foreign investments. By providing a mechanism to address security concerns, CFIUS ultimately helps maintain public confidence in the openness of the U.S. economy while protecting critical U.S. national interests. Balancing U.S. national security concerns with the benefits of foreign investment will continue to be a central challenge for the Committee in the years to come. For international practitioners and those involved in cross-border deals, assessing CFIUS-related compliance risks presented by a transaction should be a key consideration when conducting transaction due diligence before a deal is closed.