U.S. cuts off exports to Chinese chipmaker

Fujian Jinhua makes memory chips for computers and smartphones

DoC officials are now barring USA companies from selling any products to Fujian Jinhua, which was recently nearing completion of a new dynamic random access memory (DRAM) factory project.

The controls imposed Monday on Fujian Jinhua Integrated Circuit Co. reflect concern Chinese competition could drive American technology suppliers out of business, leaving the military without secure sources of components. This will cripple Jinhua's operations, as it relies heavily on American components for its semiconductors.

However, the Commerce Department's export ban could end up limiting the Chinese company's development.

President Donald Trump's administration took action on Monday to cut off a Chinese state-backed chipmaker from U.S. suppliers amid allegations the firm stole intellectual property from USA semiconductor company Micron Technology Inc.

The move comes after US-based Micron Technology accused the Chinese company of conspiring to obtain its trade secrets.

If the U.S. Administration proceeds with the next phase of tarriffs against China, it could well hit over $505 billion in total. Chinese entities are often scrutinised on the ground of potential threat to the US economy and national security.

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"This appears to be a dramatic expansion of the use of the entity list for economic purposes", he said, explaining that the entity list had traditionally been used to prevent imminent violations of USA export control laws. Micron officials allege the company, based in Fujian Province, has violated the United States firm's intellectual property rights.

Now, the Trump administration is taking action "in light of the likely USA -origin technology" that "threatens the long term economic viability of US suppliers of these essential components of US military systems".

The commerce department argued that it had engaged in "activities that are contrary to the national security interests of the United States".

Micron, a maker of memory chips with factories in Virginia and Utah, has accused Fujian Jinhua and Taiwanese partner United Microelectronics Corp of stealing its chip designs in a lawsuit in California.

But it needs American components and manufacturing equipment to fulfill that vision. The move is likely futile as "such license applications will be reviewed with a presumption of denial", Commerce says.

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