US Expands China Chip Ban, Weighs Blacklisting of Top Chinese Chipmaker

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The United States has expanded its ban of exports to China of equipment that can make semiconductors up to 14 nanometers in size, and is considering plans to restrict NAND flash memory chip exports as well as blacklist a major Chinese memory chip maker, as China’s ruling communist party continues its aggressive posturing toward other governments in its region.

Previously, the United States had banned the sale of equipment that can produce chips of 10 nm or smaller to Chinese chip manufacturers, as part of its efforts to contain the Chinese communist regime’s efforts to expand its influence networks through technology and continued economic expansion. Since late July, the ban has been expanded to 14 nm chips, according to major U.S. chips making equipment suppliers, such as Lam Research Corp., that have been notified by the government about the expanded restrictions.

The development follows a historic $52 billion bill passed by U.S. congress on July 27 to aid domestic chip makers in research, development, and production volume. It is worth noting that one of the conditions is that the companies that receive funds will not increase advanced chip productions in mainland China.

The expanded restrictions will also affect the production plants run by other countries’ chip manufacturers that are contracted to operate in mainland China, such as Taiwan Semiconductor Manufacturing Co. (TSMC).

Employees make chips at a factory of Jiejie Semiconductor Company in Nantong, in eastern China’s Jiangsu Province, on March 17, 2021. (STR/AFP via Getty Images)

The U.S. Department of Commerce said in a statement that the tightening of policies is to impair “PRC efforts to manufacture advanced semiconductors to address significant national security risks to the United States.”

Meanwhile, it’s reported that the United States is planning to ban the exports of U.S. chipmaking equipment that produces advanced NAND chips to Chinese chipmakers, such as Yangtze Memory Technologies Corp (YMTC).

On Aug. 1, U.S. senators, including Senate majority leader Chuck Schumer, requested that the Department of Commerce to add YMTC to the U.S. trade blacklist.

Weighing Bans, Blacklisting as Companies Talk to Tech Giants

NAND flash memory chips are used to store data in smartphones, personal computers, and data centers such as those of Amazon, Facebook and Google.

If the NAND chip ban is officially issued, it would be the first time that the United States uses trade restrictions to contain China’s ability to produce non-military use memory chips, broadening the scope of the United States’ protection of its national security.

The new Apple iPhone SE is displayed at the Apple Store on 5th Avenue shortly after it went on sale in Manhattan, New York, on March 18, 2022. (Mike Segar/Reuters)

YMTC is a state-owned company and China’s only storage NAND flash memory manufacturer competing with major U.S. manufacturers. Its global market share is 5 percent. In a report released by the White House in June 2021, YMTC was identified as the “national champion” enterprise of the Chinese communist regime, having received $24 billion in subsidies from the Chinese government.

YMTC is under investigation by the U.S. Commerce Department for selling chips to Huawei, a major Chinese state-owned telecommunication equipment company that has been blacklisted by the United States for national security reasons. According to Bloomberg, YMTC is in talks with Apple to supply flash memory chips to iPhones.

Huge Blow to YMTC and China’s Ambition

Mr. Huang, a Taiwanese semiconductor professional who has been in the business for more than 20 years, told The Epoch Times that if the new U.S. sanctions are extended to NAND chips, it would be a huge blow to YMTC and China’s development of memory chips, especially to their capacity and market share.

“(Then the CCP) has to spend a lot of effort and a long time to catch up with the development in the industry. They have to do R&D and everything by themselves and it will take them more than ten years—it is very difficult.”

Huang also warned that with tightened restrictions by the United States, the Chinese regime will likely try to obtain the technologies they need from other companies and countries, using all kinds of means—including illegal methods. The United States, Taiwan, Japan have all been vigilant and are curbing the outflow of these technologies and talent to China.

“The Taiwan government’s protection of semiconductor technology has been upgraded to a national security level. Taiwan’s national security department is actively investigating and restricting the professionals in this area to go to China,”Huang said.

Xia Song and Luo Ya contributed to this report.

Alex Wu

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Alex Wu is a U.S.-based writer for The Epoch Times focusing on Chinese society, Chinese culture, human rights, and international relations.