US to add over 30 Chinese firms to trade blacklist

WASHINGTON – The US plans to put Yangtze Memory Technologies and more than 30 other Chinese companies on a trade blacklist that would prevent them from buying certain American components, deepening tensions between the two economic superpowers.

The US Commerce Department will add China’s leading maker of memory chips and the others to the so-called Entity List as early as this week, according to a person familiar with deliberations who asked not to be named discussing a sensitive matter.

Companies on the list are blocked from buying technology from US suppliers unless they get a special export licence from the Commerce Department.

The move would represent the latest escalation in the US-China conflict over technology. The US unveiled a sweeping

set of restrictions on China’s ability to buy semiconductors

and chipmaking equipment in October, putting Yangtze Memory and other companies on a list for further scrutiny at the time.  

At the time, the Commerce Department added 31 organisations including Yangtze Memory to what is known as the Unverified List, which means the US authorities are not able to prove that those companies are not supporting the Chinese military.

That set in motion a 60-day countdown during which the companies would have to prove their businesses were not involved in activities that jeopardised US national security.

China had appeared to be cooperating with the US authorities to prevent Yangtze Memory and other firms from being added to the Entity List. That involved China’s Ministry of Commerce helping domestic companies through end-use checks required by the Biden administration, including disclosures about products and operations.

Yangtze Memory, based in Wuhan, is China’s largest 3D Nand semiconductor-maker, producing memory chips that go into smartphones and other computing devices in competition with the likes of Samsung Electronics. The company had been in talks to supply Apple, which would have marked a significant step for China’s tech industry, but that has since been put on hold. 

The Financial Times was first to report the intention to blacklist Yangtze Memory.

US officials imposed the latest chip restrictions by explaining they are necessary to stop China from becoming more of an economic and military menace. The Biden administration wants to ensure the country’s chipmakers do not secure the capability to make advanced semiconductors that would bolster China’s military.

China has sharply criticised the US’ moves, arguing that the US is trying to stop its rise. This week, China filed a dispute with the World Trade Organisation trying to overturn US-imposed trade controls, arguing they will disrupt global trade and supply chains. BLOOMBERG