Yangtze Memory Technologies (YMTC), a Chinese chip manufacturer, and 35 other Chinese companies would be added to a trade blacklist by the Biden administration, preventing them from purchasing specific American components, a report from Bloomberg reveals.
As soon as this week, the Chinese businesses will be included on an "Entity List" maintained by the U.S. Department of Commerce.
Once a company is added to the entity list, even low-tech supplies from the U.S. must apply for a special license before sending them to the company. YMTC declined to comment, and when Reuters reached out to the U.S. Department of Commerce for comment outside of business hours, they did not answer right away.
According to a U.S. Commerce Department official, YMTC was one of the dozens of other Chinese companies that were "at risk" of being put on a trade blacklist as early as Dec. 6. Tensions with Beijing increased in October when 31 organizations, including YMTC, were added to a list of businesses that U.S. inspectors have been unable to inspect.
Last week, Alan Estevez, the chief export controls official for the Department of Commerce, claimed that China had finally changed its tune and was now permitting select companies to be inspected after a protracted period of non-cooperation.
Beijing, which this week lodged a complaint with the World Trade Organization regarding the export controls of Oct. 7, is sure to object to the YMTC move. YMTC has been referred to as a "national champion" by the White House.
The Biden administration is anxious that YMTC may sell memory chips below cost and put pressure on U.S. rivals like Micron as well as businesses in allied nations. This worry is in addition to worries that YMTC broke U.S. law.
The Financial Times reported in October that YMTC had been storing foreign chip manufacturing equipment for months in expectation that the Biden administration was getting ready to take steps that would harm the business.
The U.S.-China tech conflict has escalated once again as a result of this action. Washington is attempting to hinder China's ability to develop technology with military uses, such as artificial intelligence, nuclear weapon modeling, and the development of hypersonic missiles. As it comes under increased pressure from the U.S. and its allies, China has also been taking measures to strengthen its own technology capabilities.
The U.S. is currently negotiating a trilateral agreement with Japan and the Netherlands to stop Dutch and Japanese chipmaking tool businesses from exporting cutting-edge machinery to China. The U.S. is expecting the agreement will support a comparable embargo on U.S. tool manufacturers that were included in the export curbs of Oct. 7.
