China’s semiconductor catch-up efforts dealt blow by US sanction against mainland chip maker
- Fujian Jinhua Integrated Circuit Co has been cut off from US hi-tech suppliers, putting in limbo its domestic production of memory chips
China’s ambition to accelerate the development of its semiconductor industry received another blow after the US government, citing national security concerns, slapped export restrictions on US companies working with memory chip maker Fujian Jinhua Integrated Circuit Co, which could further heat up the trade war between the world’s two largest economies.
The sanction, which was handed down on Monday by the US Department of Commerce, took effect on Tuesday and immediately cut off the Chinese chip firm from its hi-tech suppliers in the US – a trade ban that earlier crippled the operations of ZTE Corp for three months this year before the telecommunications equipment maker agreed to a settlement with Washington in July.
The US move may put in limbo Jinhua’s trial production of dynamic random access memory (DRAM) chips that it started this year, as the company nears completion of its US$5.65 billion fabrication facility in Jinjiang, a city in the southeast coastal province of Fujian.
The Commerce Department has put Jinhua on its Entity List, which identifies those “reasonably believed to be involved, or to pose a significant risk of being or becoming involved, in activities contrary to the national security or foreign policy interests of the United States”, according to a statement released by the agency on Monday in the US.
“Placing Jinhua on the Entity List will limit its ability to threaten the supply chain for essential components in our military systems,” said Secretary of Commerce Wilbur Ross in the same statement.