US adds 36 Chinese companies to export blacklist, including country’s top flash memory chip maker
- Decision meant to restrict Beijing’s ability to leverage technologies for ‘military modernisation and human rights abuses’
- Biden administration also removed 25 Chinese firms from another trade watch list after successful end-user checks
The US government on Thursday added three dozen Chinese firms to its export blacklist, including the country’s top flash memory chip maker, marking Washington’s latest effort to block China from a global hi-tech supply chain that supports the production of advanced military equipment.
Most notable among the newly added companies is Wuhan-based Yangtze Memory Technologies Co, the biggest player in China’s flash memory market and a state-owned company estimated to control 5 to 6 per cent of the global NAND flash memory market. A YMTC subsidiary in Japan was also included in the latest trade blacklist.
The latest additions to the Entity List followed Washington’s export controls update in October restricting Beijing’s ability to acquire high-end US chip technology, equipment and even blocks US citizens from working for certain firms. In November 2021, the US government added a dozen Chinese firms to this export blacklist.
Other well-known names on the expanded Entity List include Shanghai Micro Electronics Equipment, which is perhaps Beijing’s best current hope to produce machines that can manufacture advanced chips. The firm was previously on the Unverified List.
China’s top memory chip maker could see production disruptions from blacklisting
Among the new names on the list, 21 were identified as major players in research and development, manufacturing and sales of AI chips with close ties to government organisations supporting China’s defence industry.
The Commerce Department also applied the so-called foreign direct product rule to 21 of the 36 companies on the Entity List – including YMTC and its subsidiary – to prevent them from obtaining US-origin technologies from other countries.
In response to an earlier report about Washington’s expanded sanctions list, China’s foreign ministry criticised the US for overstretching the notion of national security, abusing export control measures and weaponising sci-tech issues.
“This is blatant economic coercion and bullying in the field of technology,” the ministry’s spokesman Wang Wenbin said at a press conference on Wednesday.
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Chinese Foreign Minister Wang Yi, speaking on Monday during a virtual meeting with his South Korean counterpart, called on Seoul to oppose the US chip export controls.
While the addition of companies to the Entity List exacerbates the hi-tech supply stand-off, the Commerce Department simultaneously announced a move that could ease some pressure on Chinese hi-tech firms. It removed 25 Chinese companies from a watch list of “unverified” firms that might have military connections, following end-user checks.
Companies are put on that list when the US government cannot rule out the possibility that they are military suppliers, and their removal from the list suggests there would be no further sanctions.
However, the Commerce Department moved nine Russian companies to the Entity List from the Unverified List, citing an inability to complete end-user checks.
US chip exports ban to have little impact on PLA for now: analysts
“When a host government facilitates a check that results in our ability to confirm a company’s bona fides, the company comes off the Unverified List, as demonstrated by today’s 25 removals of Chinese companies from our restricted party lists,” said Matthew Axelrod, assistant secretary of commerce for export enforcement, in the statement.
“But when a host government persists in preventing a check, there are real consequences, as demonstrated by today’s addition of nine Russian parties to the Entity List.”
When asked about the US plan to remove some Chinese entities from the Unverified List, Beijing’s foreign ministry repeatedly urged Washington to “stop targeting specific Chinese companies with discriminatory and unfair measures”.
“China will continue to firmly defend the legitimate and lawful rights and interests of Chinese companies,” Wang of the foreign ministry said on Thursday.