As the year 2022 comes to an end, the United States has taken the time to analyze the actions of certain Chinese groups specializing in semiconductors. For these companies, the sanction fell: they will end up in the Entity List, the black list of the Department of Commerce.
Some companies in China had fallen through the cracks of the American net
With the broad US restrictions announced by the Biden Administration in October 2022, the Entity List has been updated. The United States has decided to prohibit the export of high-performance semiconductors or any tool for manufacturing them to Chinese companies on this famous blacklist. The only alternative, once on this list, is for the American exporting company to obtain a dedicated license, considered complex to have according to the Biden Administration.
If some Chinese companies had managed to stay off the list, an analysis conducted by the Commerce Department would have brought them back. During the month of December 2022, Yangtze Memory Technologies (YMTC) joined the Entity List against its will. The firm would have provided Huawei with memory chips for its smartphones, which is contrary to the restrictive measures put in place by Donald Trump in 2019, when he was president of the United States.
Chinese employees surprised to be on US blacklist
In addition to YMTC, PXW Semiconductor Manufactory has learned that it is also on this list. The employees of the start-up specialized in manufacturing chips would have started to panic when they heard the news. ” Most team leaders and executives are in an emergency meeting, but the rest of us aren’t allowed to discuss such a sensitive topic. said one of the employees to the FinancialTimes.
PXW benefits from joint support from the Chinese government, which notably involves substantial funding. The company had ordered equipment from various US companies that were expected to arrive next year. However, the fact that the start-up was placed in the Entity List compromises the arrival of this material.
Another Chinese company is also affected by these restrictions. This is Hefei Core Electronic Storage (HCSE), a company founded by former employees of the Taiwanese company VIA Technologies, which also specializes in electronic components. HCSE was created with the aim of developing a Chinese alternative to processors from the American giant Intel. One of the company’s engineers claimed that no one within the company expected them to end up in the Entity List.
According to one of the officials working on the case for the Commerce Department, the United States discovered that the company was working on processors suitable for supercomputers. In addition, it would support through its actions, the creation of advanced memory chips. However, these two acts are targeted by the controls carried out by the American authorities.