“The goal is not to hurt non-indigenous companies,” one of the people briefed on the matter said.

China’s top memory chip maker replaces CEO amid US sanctions risk

The White House and Commerce Department declined to comment. SK Hynix Inc, Samsung Electronics Co Ltd, YMTC, and CXMT did not respond to requests for comment.

The Chinese Embassy in Washington on Thursday described the expected rules as “sci-tech hegemony”. It accused the United States of using its “technological prowess … to hobble and suppress the development of emerging markets and developing countries.”

The move could assuage the worst fears of South Korean memory chip makers that the United States might hobble their China-based manufacturing business in its effort to thwart China’s rise, cripple YMTC and protect vulnerable US memory chip makers.

They still worry, however, that the case-by-case review standard is far from an explicit greenlight for US equipment to be shipped to their Chinese facilities and could result in bickering with regulators over what shipments to approve.

Details of some of the new regulations facing China-based memory chip makers have not been previously reported.

The new curbs target China-based producers of DRAM chips, which hold information from applications while the system is in use, and NAND chips, which are used for data and file storage.

US suppliers seeking to ship equipment to China-based semiconductor firms would not have to seek a license from the Commerce Department if selling to firms producing DRAM chips above the 18-nanometre node, NAND Flash chips below 128 layers, or logic chips above 14 nanometres, the sources said.

However, US companies selling sophisticated technology to indigenous Chinese chip makers producing DRAM chips at 18 nanometres or below, NAND flash chips at or above 128 layers or logic chips at or under 14 nanometres would have to apply for a license that would be reviewed with the tough “presumption of denial” standard.

US suppliers seeking to sell the equipment to non-Chinese origin companies operating in China and producing those same types of chips would also face a license requirement but the applications would be reviewed on a case-by-case basis, the sources added.

If published as expected, the rules would mark the first US bid through export controls to target Chinese production of memory chips without specialised military applications, representing a more expansive view of American national security, according to export control experts.

China’s top memory chip maker in the crosshairs of US sanctions

They would also hit YMTC, a rising power in manufacturing NAND chips founded in 2016. Its expansion and low-price offerings represent “a direct threat” to US-based Micron Technology Inc and Western Digital Corp, the White House said in a June 2021 report.

The rules could also hurt CXMT, a state-backed Chinese company that is working to enter the DRAM market.

LAM Research Corp, Applied Materials Inc and KLA Corp, major US vendors of equipment to make chips, are likely to be hit by the restrictions. LAM and Applied Materials did not respond to requests for comment. KLA declined to comment.

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AI chip maker ordered by US government to halt exports to China

AI chip maker ordered by US government to halt exports to China

According to consulting firm Yole Intelligence’s Walt Coon, 25 per cent of SK Hynix’s and 38 per cent of Samsung’s NAND wafer production is based in China, and about 50 per cent of SK Hynix’s DRAM production is in China.

Reuters first reported that the United States was considering limiting shipments of American chip-making equipment to memory chip makers in China including YMTC, part of a bid to halt China’s semiconductor sector advances and protect US companies.

Reuters also reported last month that the Biden administration planned in October to broaden curbs on US shipments to China of semiconductors used for artificial intelligence and chipmaking tools.