USA blocks exports to Chinese chipmaker as tensions simmer

Gladys Abbott
November 2, 2018

The Trump administration has imposed restrictions on technology exports to a Chinese semiconductor maker, citing national security grounds amid a mounting tariff battle with Beijing. The Trump administration has slapped billions of dollars in tariffs on Chinese imports, claiming the country is stealing United States technology.

The use of the "entity list" - which governs what companies US firms can do business with - to protect the economic viability of a USA industry appears to be unprecedented, said Washington trade lawyer Douglas Jacobson.

The Commerce Department appeared to side with Micron in its statement, claiming that the "likely USA -origin technology" to be produced at the new Fujian plant would threaten "the long term economic viability of US suppliers of these essential components of USA military systems". As a result of the Commerce Department action, a license is now required for all exports, re-exports and transfers of commodities, software and technology, subject to the Export Administration Regulations.

U.S. Commerce Secretary Wilbur Ross said the U.S. believes the Chinese firm's new plant was likely the beneficiary of "U.S. -origin technology" and its additional production would threaten the long-term viability of U.S. chipmakers. We'll probably see how the Chinese government responds to this escalation of economic tension from the the coming days, weeks and months.

It said in a statement that Fujian Jinhua "poses a significant risk of becoming involved in activities that are contrary to the national interests of the United States".

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Calls to Fujian Jinhua's offices rang unanswered Tuesday and there was no immediate response to an inquiry made through their website.

The first was ZTE after the company was caught exporting products to Iran and North Korea.

U.S. hardware maker Micron Technology has repeatedly accused Fujian Jinhua, and its Taiwanese partner United Microelectronics Corp (UMC), of stealing its chips designs [1, 2]. Micron sued Jinhua in December in federal court in California.

U.S. firms now require a permit to fare to Fujian Jinhua.

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