Artificial intelligence

Biden blacklists China’s YMTC, cracks down on AI chip industry

WASHINGTON, Dec 15 (Reuters) – The Biden administration on Thursday added Chinese memory chipmaker YMTC and 21 “important” Chinese players in the artificial intelligence chip sector to a trade blacklist, broadening its crackdown on the industry Chinese chips.

YMTC, long in the sights of the US government, was added to the list over fears of diverting US technology to Chinese tech giants Huawei Technologies Co Ltd. [RIC:RIC:HWT.UL] and Hikvision (002415.SZ). The move, listed in the Federal Register, will prevent YMTC suppliers from shipping US goods to it without a hard-to-obtain license.

The 21 Chinese AI chip entities added to the trade blacklist, which include Cambricon Technologies Corp (688256.SS) and the ECCC, face an even harsher sanction, with the US government effectively blocking their access to technology made anywhere in the world with US equipment.

As the Chinese government seeks to break down the barriers between its military and civilian sectors, “the national security interests of the United States demand that we act decisively to deny access to advanced technologies,” the deputy secretary said. to Commerce for the Export Administration, Thea Kendler, in a statement.

YMTC, Cambricon and CETC did not immediately respond to requests for comment.

The Chinese Embassy in Washington says the United States is engaging in “blatant economic coercion and intimidation in the field of technology”, undermining normal business activities between Chinese and American companies and threatening stability. global supply chains.

“China will resolutely protect the legitimate rights and interests of Chinese enterprises and institutions,” he added.

The movement is based on extensive export controls imposed on Beijing in October to slow Beijing’s technological and military advances, including measures to restrict China’s access to U.S. chipmaking tools and cut it off from some chips made anywhere in the world with U.S. equipment .

It also comes as Congress prepares finalize legislation prohibiting the US government from purchasing products containing semiconductors made by YMTC, Chinese memory chip maker CXMT, or China’s leading chip maker SMIC.

On Thursday, the Commerce Department also targeted nine Chinese entities for allegedly seeking to support China’s military modernization, including Shanghai Micro Electronics Equipment Group Co Ltd (SMEE), China’s only lithography company.

SMEE did not immediately respond to a request for comment.

He also added Chinese surveillance camera maker Tianjin Tiandi Weiye Technologies for allegedly participating in “China’s campaign of repression, mass arbitrary detention and high-tech surveillance against Uyghurs”. Tiandi did not immediately respond to a request for comment.

A total of 35 Chinese entities have been added to the US trade blacklist, known as the Entity List, along with the Japanese subsidiary of YMTC.

Thursday’s announcements weren’t all bad news for Beijing. The Biden administration cut a subsidiary of Wuxi Biologics, a company that makes ingredients for AstraZeneca (AZN.L) COVID-19 vaccine, and 26 other Chinese entities on the so-called unverified list through successful site visits.

Two of the Chinese companies removed from the unverified list – YMTC and SMEE – have been added to the entity list.

Reuters reported on Wednesday that such a movement was in preparation. Reuters also reported earlier This year that US officials were able to conduct an on-site visit to Wuxi Biologics before another company subsidiary was removed from the unverified list in October.

Wuxi did not respond to a request for comment.

Companies are added to the unverified list if the US cannot conduct on-site visits to determine if they can be trusted to receive exports of sensitive US technology, inspections which in China require ministry approval Trade.

Adding to the unverified list requires U.S. vendors to perform greater due diligence before shipping to targeted companies.

Commerce Department officials attributed Beijing’s greater cooperation in site checks to a new U.S. rule announced in October. Under this rule, if a government blocks U.S. officials from performing site checks at companies on the unverified list, Washington can add them to the entity list after 60 days.

As part of the new policy, the Commerce Department on Thursday removed nine Russian entities from the unverified list and added them to the Entity List because the United States was unable to conduct visits to square.

Senate Democrat Chuck Schumer announced new sanctions on YMTC, which Reuters said was being investigated for allegedly violating US export regulations by supplying chips to Huawei without license.

“The YMTC poses an immediate threat to our national security, so the Biden administration needed to act quickly to prevent the YMTC from gaining even an inch of military or economic advantage,” he said in a statement. communicated.

Reporting by Alexandra Alper; Additional reporting by David Shepardson, Doina Chiacu and Michael Martina; edited by Chris Sanders, Lincoln Feast, Doina Chiacu and Jonathan Oatis

Our standards: The Thomson Reuters Trust Principles.

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