The U.S. Commerce Department has added 140 Chinese technology companies to its “entity list,” imposing stricter export controls on the Chinese tech industry. New rules announced this week widen the restrictions to include firms producing computer chips, chipmaking tools, and software. The companies are mostly based in China, although some Chinese-owned businesses based in Japan, South Korea, and Singapore are also included.
Actions such as this are part of a larger movement by the U.S. government to restrict the Chinese ability to access advanced technologies from the United States, either for military applications or applications related to weapons of mass destruction. The ban includes export bans on high-bandwidth memory chips necessary in data processing in applications related to artificial intelligence.
The Chinese Ministry of Commerce responded in strong terms, immediately condemning the move as “economic coercion” and promising to defend its interests. China, in a statement, berated the U.S. for overreaching its powers and disrupting market practices.
U.S. Commerce Secretary Gina Raimondo said the new export controls would help choke China’s ability to build supercomputers that can help design nuclear weapons, or technologies that can be used in various military and surveillance activities. The addition of many important semiconductor manufacturers to the entity list will likely prohibit U.S. companies from providing key technology to those firms.
The Entity List actions are designed to block China’s access to key semiconductor technologies that could help its military modernization, as well as human rights abuses,” said Matthew S. Axelrod, assistant secretary for export enforcement.
While this represents the latest effort in a series of initiatives to bolster U.S. semiconductor self-sufficiency, it is also a strategic approach toward safeguarding American innovation. China, on its part, has been trying hard to develop its semiconductor industry by spending millions through investment and subsidies, although the country still falls behind in some areas.
These sanctions have already affected the stock market, with shares of Advantest, Tokyo Electron, and Applied Materials, chipmakers of Japan, increasing abruptly, while those companies which the new controls struck down saw their stocks plunging to the minimum, like China’s Naura Technology Group and Piotech Inc.
