U.S. restricts exports to Chinese semiconductor firm Fujian Jinhua

Andrew Cummings
November 2, 2018

The firm is nearing completion of substantial production capacity for dynamic random access memory (DRAM) integrated circuits, likely to be based on US-technology.

"When a foreign company engages in activity contrary to our national security interests, we will take strong action to protect our national security", Commerce Secretary Wilbur Ross said.

The choice comes in the midst of claims that the state-sponsored organization has stolen protected innovation from USA chipmaker Micron Technology, as indicated by reports. We'll probably see how the Chinese government responds to this escalation of economic tension from the U.S.in the coming days, weeks and months.

The company was added to the department's "Entity List", which will require it to obtain an export license for all software, technology and commodities, the Commerce Department said.

But the restriction of exports to Fujian Jinhua actually relates to a much older problem: Accusations of Chinese businesses stealing American trade secrets to shift the balance sheets (and balance of power) in their favor.

The Commerce Department said that ZTE lied to American officials about punishing employees who violated United States sanctions against North Korea and Iran.

The world's top two economies are already waging a tariff war over their trade disputes, with USA duties in place on $250 billion worth of Chinese goods and Chinese duties on $110 billion of US goods. Jinhua sued the USA company the following month in a Chinese court and obtained an order blocking sales of some Micron products.

It was not immediately clear what effect the Commerce Department action will have on Fujian Jinhua's operations.

The stand-off between the world's two superpowers continued this week as the U.S. banned exports to a Chinese tech manufacturer on national security grounds. "Placing Jinhua on the Entity List will limit its ability to threaten the supply chain for essential components in our military systems".

Jinhua is opening a $5.7 billion factory in China's Fujian province and has become increasingly ambitious in its desire to become a global player in the memory chip business.

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