The Biden administration added Chinese chipmaker YMTC to a blacklist of trade, adding 21 Chinese “majors” in artificial intelligence chip sectors. This is a further step towards its anti-China crackdown.
YMTC was long under the watchful eye of the U.S. government. It was included to this list because it is feared that American technology could be diverted to blacklisted Chinese tech companies, Huawei Technologies Co Ltd and Hikvision. This Federal Register decision will prohibit YMTC’s vendors from shipping U.S. products to it without a hard-to-obtain licence.
Cambricon Technologies Corp and CETC are among 21 Chinese entities that have been added to the blacklist. The U.S government will effectively block their access to U.S. technology anywhere on the planet.
PXW Semiconductor Manufactory Co was another notable name. This startup chip factory is supported by Shenzhen’s city government, and run by an ex-Huawei executive.
The Chinese government is trying to eliminate barriers between civilian and military sectors. “U.S. security interests demand that we act decisively in denial of access to advanced technologies,” Thea Kendler, Assistant Secretary of Commerce for Export Administration stated in a statement.
YMTC Cambricon CETC, Cambricon and PXW didn’t immediately reply to our requests for comment. Cambricon shares, which were spun from the China Academy of Sciences government think tank in 2016, and made public in four years, dropped 6% on Friday.
Washington, DC: The Chinese Embassy in Washington stated that the United States engaged in “blatant Economic Coercion and Bullying in the Field of Technology”, undermining the normal business activity between American and Chinese companies and threatening global supply chain stability.
It stated that China will “resolutely protect the lawful interests and rights of Chinese companies” and other institutions.
This move is a continuation of the sweeping export restrictions imposed upon Beijing in October in order to slow Beijing’s technological and military advancements. It also includes measures to limit China’s access U.S.-based chipmaking tools, and to cut off certain American chips.
This comes at a time when Congress is preparing to pass legislation that would prohibit the U.S. from purchasing products that include semiconductors manufactured by YMTC or CXMT, a Chinese memory chipmaker.
On Thursday, the Commerce Department also took out nine Chinese companies for allegedly trying to help China’s military modernization. This included Shanghai Micro Electronics Equipment Group Co Ltd. (SMEE), China’s sole lithography company.
SMEE didn’t immediately reply to a request for comments.
Tianjin Tiandi Weiye Technologies, a Chinese surveillance camera manufacturer, was added to the list for being allegedly involved in China’s “campaign of repression”, mass arbitrary detention and high-tech surveillance on Uyghurs. Tiandi didn’t immediately reply to our request for comment.
The U.S. Trade Blacklist (also known as the entity List) included 35 Chinese entities, along with YMTC’s Japan-based subsidiary.
Beijing didn’t get all the bad news Thursday. A subsidiary of Wuxi Biologics was removed by the Biden administration. This company makes components for AstraZeneca’s COVID-19 vaccine. 26 other Chinese entities were also taken off the unverified list due to site visits.
Two Chinese firms, YMTC (and SMEE) were removed from the unverified List. They were both added to the entity listing.
Reuters reported Wednesday that such a move is in progress. Reuters reported that earlier in the year, U.S. officials had been able to visit Wuxi Biologics. This was before a separate subsidiary was taken off the unspecified list.
Wuxi didn’t respond to our request for comment.
If the United States is unable to conduct on-site inspections to verify that they are safe to export sensitive U.S. technology, companies will be added to the unverified List. Inspections in China, however, require the approval of the China’s commerce ministry.
U.S. suppliers are required to do more research before shipping the target companies to avoid being added to the unverified List.
Officials from Commerce Department have pointed to increased cooperation by Beijing during site inspections due to an October U.S. Rule. Washington can add companies to the entity listing if they are prevented by a country from carrying out site inspections at the unconfirmed list.
The Commerce Department removed nine Russian entities on the unverified List and added them to its entity list as the United States was unable to visit the sites.
Chuck Schumer, a top senator Democrat, announced the increased penalties for YMTC. Reuters reports that YMTC was being investigated by the United States Export Administration (USEA) after reportedly supplying chips without a license to Huawei.
He stated that YMTC is a threat to national security and the Biden Administration had to take swift action to stop YMTC gaining any military or economic advantages.