The US administration added Chinese memory chipmaker YMTC and 21 “major” Chinese players in the artificial intelligence chip sector to a trade blacklist.
The US administration on Thursday added Chinese memory chipmaker YMTC and 21 “major” Chinese players in the artificial intelligence chip sector to a trade blacklist, broadening its crackdown on chip industry of China. A total of 35 Chinese entities were added to the U.S. trade blacklist, known as the entity list, as well as YMTC’s Japan-based subsidiary.
YMTC, which has long been on the government’s radar, was added to the list due to concerns that it could divert American technology to previously blacklisted Chinese tech giants Huawei Technologies Co. Ltd. [RIC:RIC:HWT.UL] and Hikvision (002415.SZ). The move, detailed in the Federal Register, will prevent YMTC’s suppliers from shipping goods to it from the United States without a difficult-to-obtain licence.
The 21 Chinese AI chip entities that have been added to the trade blacklist, including Cambricon Technologies Corp. (688256.SS) and CETC, face a harsher penalty, with the US government effectively blocking their access to technology made anywhere in the world with US equipment.
Another notable name was PXW Semiconductor Manufactory Co, a startup chip fab is backed by the Shenzhen city government and led by an ex-Huawei executive.
As the Chinese government seeks to remove barriers between its military and civilian sectors, “U.S. national security interests require that we act decisively to deny access to advanced technologies,” Assistant Secretary of Commerce for Export Administration Thea Kendler said in a statement.
Requests for comment were not immediately returned by YMTC, Cambricon, CETC, or PXW. Cambricon shares fell 6% on Friday after being spun out of the government think tank China Academy of Sciences in 2016 and going public four years later.
According to the Chinese embassy in Washington, the US is engaging in “blatant economic coercion and bullying in the field of technology,” undermining normal business activities between Chinese and American companies and threatening global supply chain stability.
“China will steadfastly protect the legitimate rights and interests of Chinese companies and institutions,” it added.
The move builds on sweeping export controls imposed on Beijing in October to slow Beijing’s technological and military advances, including measures to curb China’s access to U.S. chipmaking tools and cut it off from certain chips made anywhere in the world with American equipment.
It also comes as Congress prepares to finalize legislation to bar the U.S. government from buying products that contain semiconductors made by YMTC, Chinese memory chipmaker CXMT or China’s top chip manufacturer, SMIC.
The Commerce Department on Thursday also targeted nine Chinese entities for allegedly seeking to support China’s military modernization, including Shanghai Micro Electronics Equipment Group Co Ltd (SMEE), China’s only lithography company. SMEE did not immediately respond to a request for comment.
It added Chinese surveillance camera maker Tianjin Tiandi Weiye Technologies for allegedly participating in “China’s campaign of repression, mass arbitrary detention, and high-tech surveillance against Uyghurs.” Tiandi did not immediately respond to a request for comment.
Announcements on Thursday weren’t all bad news for Beijing. The US administration removed a subsidiary of Wuxi Biologics, a company that makes ingredients for AstraZeneca’s (AZN.L) COVID-19 vaccine, and 26 other Chinese entities from the so-called unverified list thanks to successful site visits.
Two of the Chinese companies removed from the unverified list – YMTC and SMEE – were added to the entity list.
It was reported on Wednesday that such a move was in the works. Earlier this year U.S officials were able to conduct a site visit at Wuxi Biologics before a different subsidiary of the company was removed from the unverified list in October. Wuxi did not respond to a request for comment.
Companies are added to the unverified list if the US is unable to conduct on-site inspections to determine whether they can be trusted to receive sensitive US technology exports, which require approval from China’s commerce ministry.
Being added to the unverified list necessitates greater due diligence on the part of US suppliers before shipping to the targeted companies.
Commerce Department officials have attributed Beijing’s increased cooperation in site inspections to a US rule announced in October. If a government prevents US officials from conducting site checks at companies on the unverified list, Washington has 60 days to add them to the entity list.
Under that new policy, is the Commerce Department on Thursday removed nine Russian entities from the unverified list and added them to the entity list because the United States has been unable to conduct site visits.
Top Senate Democrat Chuck Schumer heralded the new penalties on YMTC, which was under investigation for allegedly violating U.S. export regulations by supplying chips to Huawei without a license.
“YMTC poses an immediate threat to our national security, so the US Administration needed to act swiftly to prevent YMTC from gaining even an inch of a military or economic advantage,” he said in a statement.
Originally published at Bangkokpost