US puts bars on Chinese chipmaker YMTC and 30 entities
Controls include a measure to cut China off from certain semiconductor chips made anywhere in the world with US tools
07 October 2022 - 18:30
byKaren Freifeld and Alexandra Alper
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Washington — The US on Friday added China’s top memory chipmaker, YMTC, and 30 other Chinese entities to a list of companies that US officials have been unable to inspect, ratcheting up tensions with Beijing and starting a 60-day clock that could trigger much tougher penalties.
The new listings were the first of a slew of new restrictions announced on Friday on exports of technology to China aimed at blocking military advances. The crackdown included curbs on access to chipmaking tools for Chinese firms including Yantze Memory Technologies Company (YMTC).
US senators from both parties have been calling for YMTC, China’s fast-growing chip manufacturer, to be placed on a trade blacklist known as the “entity list”. The company, founded in 2016, poses a “direct threat” to US chip companies, according to the Biden administration.
YMTC and the Chinese embassy in Washington did not respond to requests for comment.
YMTC is under investigation by the commerce department over whether it violated US export controls by selling chips to blacklisted Chinese telecommunications company Huawei Technologies. Its chips also are being evaluated by Apple for inclusion in some of its iPhones in China, a major concern for US legislators and the Biden administration.
Companies are added to the unverified list because the US could not complete on-site visits to determine whether they can be trusted to receive sensitive technology exports from the US. US inspections of Chinese companies require the approval of China’s commerce ministry.
US exporters must conduct additional due diligence before sending goods to entities placed on the “unverified list”, like the 31 added on Friday, and may have to apply for more licences.
Under the Biden administration’s new policy, if a government prevents US officials from conducting site checks at companies placed on the unverified list, Washington will start the process for adding them to the entity list after 60 days.
Entity listing YMTC would further escalate tensions with Beijing and force its US suppliers to seek difficult-to-obtain licences from the US government before shipping them even the most low-tech items.
Not all the measures announced on Friday were bad news for China. The US removed a unit of Wuxi Biologics, maker of ingredients for AstraZeneca’s Covid-19 vaccine, from the unverified list. Reuters reported last summer that US officials had been able to conduct an inspection at the Wuxi city site, a stepping stone to removal from the list.
A Wuxi Biologics spokesperson said the company is pleased the Wuxi site was removed from the list, given the inspection in June. The company looks forward to scheduling an inspection of its Shanghai subsidiary, which also was placed on the unverified list in February, she added.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
US puts bars on Chinese chipmaker YMTC and 30 entities
Controls include a measure to cut China off from certain semiconductor chips made anywhere in the world with US tools
Washington — The US on Friday added China’s top memory chipmaker, YMTC, and 30 other Chinese entities to a list of companies that US officials have been unable to inspect, ratcheting up tensions with Beijing and starting a 60-day clock that could trigger much tougher penalties.
The new listings were the first of a slew of new restrictions announced on Friday on exports of technology to China aimed at blocking military advances. The crackdown included curbs on access to chipmaking tools for Chinese firms including Yantze Memory Technologies Company (YMTC).
US senators from both parties have been calling for YMTC, China’s fast-growing chip manufacturer, to be placed on a trade blacklist known as the “entity list”. The company, founded in 2016, poses a “direct threat” to US chip companies, according to the Biden administration.
YMTC and the Chinese embassy in Washington did not respond to requests for comment.
YMTC is under investigation by the commerce department over whether it violated US export controls by selling chips to blacklisted Chinese telecommunications company Huawei Technologies. Its chips also are being evaluated by Apple for inclusion in some of its iPhones in China, a major concern for US legislators and the Biden administration.
Companies are added to the unverified list because the US could not complete on-site visits to determine whether they can be trusted to receive sensitive technology exports from the US. US inspections of Chinese companies require the approval of China’s commerce ministry.
US exporters must conduct additional due diligence before sending goods to entities placed on the “unverified list”, like the 31 added on Friday, and may have to apply for more licences.
Under the Biden administration’s new policy, if a government prevents US officials from conducting site checks at companies placed on the unverified list, Washington will start the process for adding them to the entity list after 60 days.
Entity listing YMTC would further escalate tensions with Beijing and force its US suppliers to seek difficult-to-obtain licences from the US government before shipping them even the most low-tech items.
Not all the measures announced on Friday were bad news for China. The US removed a unit of Wuxi Biologics, maker of ingredients for AstraZeneca’s Covid-19 vaccine, from the unverified list. Reuters reported last summer that US officials had been able to conduct an inspection at the Wuxi city site, a stepping stone to removal from the list.
A Wuxi Biologics spokesperson said the company is pleased the Wuxi site was removed from the list, given the inspection in June. The company looks forward to scheduling an inspection of its Shanghai subsidiary, which also was placed on the unverified list in February, she added.
Reuters
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