Washington: The US government is blacklisting Yangtze Memory Technologies Co., Shanghai Micro Electronics Equipment Group Co. and dozens of other Chinese tech companies, ratcheting up a trade conflict between the world's two largest economies.
The Department of Commerce is placing the companies on the so-called entity list, meaning that anyone seeking to supply them with US technology will require a license from Washington "- something that will likely be difficult to get. The lineup also includes Pengxinwei IC Manufacturing Co., better known as PXW, Bloomberg reported in October.
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 Biden administration unveiled sweeping measures that limit what US companies can sell to the country "- and it's been pushing for allies to go along with the plan.
The idea is to severely restrict China's "ability to leverage artificial intelligence, advanced computing, and other powerful, commercially available technologies for military modernisation and human rights abuses," Under Secretary of Commerce for Industry and Security Alan Estevez said in a statement.
Yangtze Memory and Shanghai Micro were added to the list out of concern that they'll work with companies that the US has decided are either a risk to national security or support oppression by the Chinese government.
Yangtze Memory and Shanghai Micro are key to China's efforts to build a domestic chipmaking business and wean itself off imports, particularly those from the US. In all, 36 companies are joining the entity list.
Shanghai Micro, better known as SMEE, is China's leading lithography equipment maker. It's a smaller rival to ASML Holding NV, the 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 SMEE will make it even less likely that a challenger emerges from China.
Yangtze Memory, meanwhile, 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. The earlier rules announced in October had 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 dollars into its domestic capabilities, with mixed results. Chinese officials are now readying an 1 trillion yuan ($144 billion) package to subsidize local chipmakers' purchase from the nation's equipment firms, Reuters has reported.
The latest announcement by the Department of Commerce also expands restrictions on AI technology. Cambricon Technologies Corp. and several of its affiliates, which are developing AI components or systems, were added to the list.
But the US also eased restrictions in certain areas. Some 26 entities will be removed from a preliminary "unverified list" because Beijing allowed US representatives to check that they're in compliance with the rules. Nine Russian companies were also taken off the preliminary list, but they were put on the entity list because Moscow has prevented attempts to confirm how their technology is being used.
