Thursday, 15 November, 2018

China urges USA to stop 'wrong actions' after semiconductor firm targeted

US bans exports to Chinese DRAM maker citing national security risk Trump hits Chinese chipmaker with export ban, still expects ‘great deal’ with Beijing
Elsie Buchanan | 02 November, 2018, 09:52

The firm is nearing completion of substantial production capacity for dynamic random access memory (DRAM) integrated circuits, likely to be based on US-technology. The company should soon be completing a DRAM factory that could be the largest such factory in the world.

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

ZDNet also notes Micron Technology, a U.S. company, is now in a legal battle with Fujian Jinhua and its Taiwanese partner United Microelectronics Corp, claiming they stole its chip designs. In April, the Trump administration banned the Chinese telecommunications company ZTE from importing USA microchips over the illegal export of technology to Iran and North Korea.

Fujian Jinhua had filed a countersuit against Micron in Chinese court in January. The company will face additional license requirements to obtain USA technology.

ZTE Corp., China's second-biggest maker of telecoms equipment, faced possible bankruptcy this year after Washington imposed a seven-year ban on sales of US technology to the company over its exports to Iran and North Korea.

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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 new restrictions mean USA firms will need special approval to export products intended for use by state-owned Fujian Jinhua Integrated Circuit Company, Ltd., according to a statement.

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

The Commerce Department cited a "significant risk" that the Chinese firm's new memory chip capacity will threaten the viability of USA suppliers of chips for military systems. He has imposed tariffs on a $250 billion list of Chinese exports.

However, that production "threatens the long term economic viability of United States suppliers of these essential components of United States military systems", the Commerce Department said.

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