Biden Cuts Off China's Yangtze, 30 Others From US Chipmaking Gear

Yangtze Memory Technologies Company (YMTC) is one of more than two dozen Chinese companies and institutions targeted in the Biden Administration’s latest round of export restrictions on semiconductor tech.

In a bulletin filed [PDF] early on Friday, the US Commerce Department added 31 Chinese firms to its “Unverified List,” effectively barring them from importing controlled US goods – in this context, American chip design and manufacturing tools – over fears they may be used to undermine US foreign policy or national security.

According to the Dept of Commerce, the decision to expand US export controls on Chinese companies was made because its regulators were unable to determine how goods were being used once imported, due in part to obstruction by the Chinese government.

The export ban primarily targets Chinese chip, biomedical, and chemical companies, as well as several national universities, including the Chinese Academy of Science, University of Shanghai for Science and Technology, and Shanghai Tech University.

However, one of the largest chipmakers on the list is YMTC, a major manufacturer of DRAM and NAND memory for the Chinese market.

The company’s inclusion on the US “Unverified List” is hardly surprising given the blowback both Apple and YMTC received after reports surfaced that the iPhone maker may source chips from the Chinese memory vendor.

"Apple is playing with fire," Senator Marco Rubio (R-FL), vice-chair of the Senate intelligence committee, told the Financial Times.

"It knows the security risks posed by YMTC. If it moves forward, it will be subject to scrutiny like it has never seen from the federal government."

• Boss of Chinese memory maker Yangtze departs for no obvious reason
• Apple warned by US lawmakers over using Chinese YMTC chips in new iPhone
• US mulls more export bans – this time, memory – in war on Chinese chipmakers
• Biden administration prepares to bring hammer down on Chinese chipmakers

The news marks YMTC’s latest blow in less than a week. On Wednesday, the leader of China’s largest memory vendor stepped down abruptly. However, unlike the controversy surrounding China’s Big Fund, the decision doesn’t appear to be related to corruption charges.

These kinds of export controls are not unusual for the Commerce Department which has taken similar measures under both the Trump and Biden administration. For example, in the final days of the Trump presidency, the administration added China’s largest foundry operator, Semiconductor Manufacturing International Co. (SMIC), to the US entities list, barring the company from importing certain US technologies without license.

The filing comes as the US Bureau of Industry issued revised rules [PDF] on the export of electronic design software and test equipment used in semiconductor manufacturing.

Over the past several months, the White House has stepped up its efforts to curb China’s domestic semiconductor industry. The Biden administration’s latest measures come just weeks after the Commerce Department issued warnings to three prominent US companies responsible for producing chipmaking equipment — KLA Corp, Lam Research, and Applied Materials — barring them from exporting equipment to China without explicit licensing.

Restrictions on the export of semiconductor manufacturing kit to China sparked fears that the curbs may inadvertently harm Samsung Electronics and SK Group. Both companies have substantial investments in China.

However, according to a Reuters report late Thursday, the South Korean foundry operators are likely to be spared the brunt of the export bans. ®