That United States added on Friday China‘s leading manufacturer of memory chips YMTC and 30 other Chinese companies on a list of companies US officials have been unable to inspect, fueling tensions with Beijing and ushering in a 60-day clock that could see much harsher penalties.
The new listings were the first in a series of new restrictions announced on Friday on technology exports to China to block military advances. The crackdown included restrictions on access to chip-making tools for Chinese firms including Yantze Memory Technologies Co (YMTC), Reuters reported a day earlier.
US senators from both parties have called for YMTC, China’s fast-growing chipmaker, to be placed on a trade blacklist known as the “entity list.” The company, founded in 2016, poses a “direct threat” to US chip companies, it says biden Administration.
YMTC and the Chinese Embassy in Washington did not respond to requests for comment.
YMTC is under investigation by the Commerce Department for violating US export controls by selling chips to blacklisted Chinese telecom company Huawei Technologies Co Ltd. Its chips are also under review by Apple Inc. for inclusion in some of its chips iPhones in China, a major concern for US lawmakers and the Biden administration.
Companies are added to the unverified list because the United States was unable to conduct on-site visits to determine if they could be trusted to receive sensitive technology exports from the United States. US inspections of Chinese companies require the approval of the Chinese Ministry of Commerce.
US exporters will need to conduct additional due diligence before shipping goods to companies on the “unverified list,” like the 31 added on Friday, and may need to apply for additional licenses.
If a government blocks U.S. officials from conducting site reviews at entities that are on the unverified list, under the Biden administration’s new policy, Washington will begin the process of adding them to the entity list after 60 days.
A company listing YMTC would further escalate tensions with Beijing and force its US suppliers to seek hard-to-obtain licenses from the US government before supplying them with even the most basic items.
Not all of the measures announced on Friday were bad news for China. The United States has removed a unit of Wuxi Biologics, maker of ingredients for AstraZeneca’s COVID-19 vaccine, from the unconfirmed list. Reuters reported last summer that US officials were able to conduct an inspection at the Wuxi City site, a stepping stone to the delisting.
A spokeswoman for Wuxi Biologics said the company was pleased that the Wuxi site was delisted in light of the June inspection. The company is looking forward to planning an inspection of its Shanghai subsidiary, which was also added to the unconfirmed list in February, she added.