US cuts tech exports to China firm on security grounds

Roman Schwartz
November 2, 2018

The Trump administration has slapped restrictions on exports to a Chinese government-backed chipmaker it says threatens US national security, adding pressure to an already fraught relationship between the world's two largest economies.

President Donald Trump has imposed tariffs of up to 25 percent on $250 billion of Chinese goods in an effort to pressure Beijing to roll back those plans. Earlier this year the U.S.

DoC officials are now barring USA companies from selling any products to Fujian Jinhua, which was recently nearing completion of a new dynamic random access memory (DRAM) factory project.

That "will limit its ability to threaten the supply chain for essential components in our military systems", Commerce Secretary Wilbur Ross said in the statement. Commerce Secretary Wilbur Ross noted that the State would ban USA firms from exporting software and technology goods to the Chinese chipmaker.

The Chinese company was caught up in the legal battle between Micron and UMC. The move is likely futile as "such license applications will be reviewed with a presumption of denial", Commerce says.

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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".

It was not immediately clear what effect the Commerce Department action will have on Fujian Jinhua's operations.

USA hardware maker Micron Technology has repeatedly accused Fujian Jinhua, and its Taiwanese partner United Microelectronics Corp (UMC), of stealing its chips designs [1, 2].

The Commerce Department said that ZTE lied to American officials about punishing employees who violated USA sanctions against North Korea and Iran. The ban was lifted in July after ZTE paid a $1 billion fine and agreed to oversight measures.

"This appears to be a dramatic expansion of the use of the entity list for economic purposes", he said, explaining that the entity list had traditionally been used to prevent imminent violations of US export control laws. Micron went to the federal district court of northern California to accuse UMC of hooking up with Jinhua to build a DRAM lab, and headhunting Micron staff (who brought intellectual property with them, Micron alleged) to run it.

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