The US government has blacklisted Yangtze Memory Technologies Co (長江儲存), Shanghai Micro Electronics Equipment Group Co (上海微電子) and dozens of other Chinese tech companies, ratcheting up a trade conflict between the world’s two largest economies.
The US Department of Commerce placed the companies on its Entity List, meaning that anyone seeking to supply them with US technology would require a license from Washington — something that will likely be difficult to get.
The lineup also includes Pengxinwei IC Manufacturing Co (鵬芯微集成電路). The fledgling chip business is run by a former Huawei Technologies Co (華為) executive and is constructing facilities close to that company’s headquarters, public records and satellite photographs show.
Photo: AFP
Huawei — a company already under strict US sanctions — was expected to buy most, if not all, of the output from that chip factory.
The latest restrictions are part of a push to limit China’s access to advanced chipmaking and artificial intelligence technology, which the US wants to keep away from the Asian nation’s military.
In October, the administration of US President Joe Biden unveiled sweeping measures that limit what US companies can sell to the country — and it has been pushing for allies to go along with the plan.
Photo: AFP
The idea is to severely restrict China’s “ability to leverage artificial intelligence, advanced computing and other powerful, commercially available technologies for military modernization and human rights abuses,” US Undersecretary of Commerce for Industry and Security Alan Estevez said in a statement. “This work will continue, as will our efforts to detect and disrupt Russia’s efforts to obtain necessary items and technologies for its brutal war against Ukraine, including from Iran.”
Yangtze Memory and Shanghai Micro were added to the list out of concern that they would work with companies that the US says pose a risk to national security or support oppression by the Chinese government, including Huawei and Hangzhou Hikvision Digital Technology Co (杭州海康威視).
Yangtze Memory and Shanghai Micro are key to China’s efforts to build a domestic chipmaking industry and wean itself off imports, particularly those from the US.
In all, 36 companies were added to the Entity List in its last overhaul.
ASML RIVAL
Shanghai Micro is China’s leading lithography equipment maker. It is a smaller rival to ASML Holding NV, a Dutch company whose machines are essential to the production of the most advanced chips.
ASML’s technological advantage in that area is currently unmatched by any company anywhere, and the clampdown on Shanghai Micro would make it even less likely that a challenger emerges from China.
Yangtze Memory is a supplier of flash memory chips — the kind of component that stores data in mobile phones and personal computers.
The company was making rapid advances in its production technology, chasing manufacturers such as Samsung Electronics Co, Kioxia Holdings Corp and Micron Technology Inc.
Yangtze Memory had been in talks to supply Apple Inc, which makes virtually all of its iPhones in China. Earlier rules, announced in October, already hurt its access to production machinery. Now the entity listing further hinders its ability to compete.
For Beijing, the export curbs have added pressure to develop a homegrown chipmaking industry. The country has poured tens of billions of US dollars into its domestic capabilities, with mixed results.
Chinese officials are readying a 1 trillion yuan (US$143.5 billion) package to subsidize local chipmakers’ purchase from the nation’s equipment firms, Reuters has reported.
The latest announcement by the US commerce department also expands restrictions on artificial intelligence (AI) technology.
Cambricon Technologies Corp (寒武紀科技) and several of its affiliates, which are developing AI components or systems, were added to the list.
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