U.S. Places Top Chinese Memory Chip Maker on Export Blacklist

Measure aimed at Yangtze Memory Technologies comes as U.S.-China technology tensions are on the rise

· The companies added Thursday included Shanghai-listed artificial-intelligence chip maker Cambricon Technologies Corp., information-technology giant China Electronics Technology Group Corp. and several research institutes that the Commerce Department said attempted to acquire U.S. technology to support China’s military.

· Pengxinwei IC Manufacturing Co. Ltd., a Shenzhen government-owned chip maker run by a former executive at Chinese telecom company Huawei Technologies Co

· Tiandy Technologies, which makes surveillance cameras and other technologies, was the subject of a report earlier this month from the Washington think tank Foundation for Defense of Democracies, which urged the U.S. government to cut off the Chinese company’s supply of Intel Corp.

· Other companies added to the blacklist included several alleged to be tied to hypersonic weapons development and production of ballistic missiles and a company that allegedly facilitated the export of U.S.-origin electronics to Iran for use in drones.

The U.S. said it would add China’s most advanced memory-chip manufacturer to an export blacklist on Thursday, ratcheting up restrictions aimed at holding back the development of the country’s semiconductor industry.

The addition of Yangtze Memory Technologies Co. to the Commerce Department’s so-called entity list could further disrupt the company’s business following an earlier round of restrictions in October that led chip-manufacturing equipment companies to pull out staff based at its facilities and pause their activities there. The blacklisting is due to take effect Friday, the Commerce Department said in a statement.

Senate Majority Leader Chuck Schumer (D., N.Y.), who is leading an effort to bar the U.S. government from buying chips from YMTC and other Chinese chip-makers as part of the coming year’s defense budget, called YMTC a threat to national security. “The Biden administration needed to act swiftly to prevent YMTC from gaining even an inch of a military or economic advantage,” he said in remarks on the Senate floor Thursday.

YMTC makes so-called flash memory and has become increasingly competitive with non-Chinese manufacturers including Idaho-based Micron Technology Inc. and South Korea’s Samsung Electronics Co.

“Today we are building on the actions we took in October to protect U.S. national security by severely restricting [China’s] ability to leverage artificial intelligence, advanced computing, and other powerful, commercially available technologies for military modernization and human rights abuses,” said Alan Estevez, the Commerce Department undersecretary for industry and security, pledging that work would continue.

The Chinese embassy in Washington didn’t immediately respond to a request for comment.

The export blacklist requires companies to obtain a license from the Commerce Department before selling any goods or services to companies on the list.

YMTC and 30 other Chinese companies were added to the Commerce Department’s so-called unverified list in October. The department said it could move them to the export blacklist if it couldn’t verify that end uses of those companies’ products weren’t problematic for the U.S.

On Thursday, the department said it was removing about two dozen Chinese companies from the unverified list after completing checks on them in cooperation with China’s government. But YMTC and about three dozen other companies were moved to the export blacklist, signaling that verification wasn’t successful.

With the growing use of chips and artificial intelligence in the military and the emergence of chip-making as a pillar of geopolitical strength, U.S. officials have increasingly come to view China’s industry as a competitive threat.

Under the Trump administration, the U.S. placed many Chinese companies on the blacklist, including leading chip maker Semiconductor Manufacturing International Corp. The U.S. also imposed rules on sales to certain Chinese customers in some cases for non-U.S. companies that use American technology.

The Biden administration has deepened the technological battle with Beijing, and in October imposed its most sweeping set of restrictions yet, including restrictions on sales to Chinese supercomputer operations and limiting China’s access to tools used to manufacture the most advanced chips. Some of those tools are only available from U.S.-based companies.

Aside from YMTC, the companies added Thursday included Shanghai-listed artificial-intelligence chip maker Cambricon Technologies Corp., information-technology giant China Electronics Technology Group Corp. and several research institutes that the Commerce Department said attempted to acquire U.S. technology to support China’s military. The entities are major AI-chip research and manufacturing companies that have ties to government organizations that support China’s defense industry, the Commerce Department said.

Another addition was Pengxinwei IC Manufacturing Co. Ltd., a Shenzhen government-owned chip maker run by a former executive at Chinese telecom company Huawei Technologies Co., which the Commerce Department said was involved in activities against U.S. interests. Huawei was placed on the blacklist in 2019 and has been a focal point of Washington’s curbs on China’s technological development.

Another company added to the blacklist, Tiandy Technologies, which makes surveillance cameras and other technologies, was the subject of a report earlier this month from the Washington think tank Foundation for Defense of Democracies, which urged the U.S. government to cut off the Chinese company’s supply of Intel Corp. processors given its links to China’s forced assimilation campaign targeting the Uyghur minority and other controversial crackdowns.

Intel said it had ceased all business with Tiandy following an internal review.

“Tiandy’s inclusion on the entity list represents a significant first step toward severing the company’s links to the global financial system and U.S. supply chains,” the author of the report, Craig Singleton, said Thursday.

Other companies added to the blacklist included several alleged to be tied to hypersonic weapons development and production of ballistic missiles and a company that allegedly facilitated the export of U.S.-origin electronics to Iran for use in drones.

China has accused the U.S. of disrupting trade and abusing export-control measures in ways that violate international rules. The country said Monday that it filed a complaint against the U.S. at the World Trade Organization, responding to what it called trade protectionism.