US Expands List of Chinese Technology Companies under Export Controls

By Evans Momodu
5 minutes read

The U.S. Commerce Department has intensified its crackdown on Chinese technology firms, adding 140 companies to its "entity list," which imposes strict export controls.

This move primarily targets businesses involved in chipmaking and related technologies, reflecting escalating tensions over technological and national security concerns. Here are the key details:

1. Expanded Export Controls:

   • The U.S. added Chinese tech companies, including overseas subsidiaries in Japan, South Korea, and Singapore, to the "entity list".
   • This list restricts U.S. exports to these firms, requiring special licenses that are likely to be denied.

2. High-bandwidth Memory Chips:

   • Restrictions include limiting exports of advanced memory chips essential for applications like artificial intelligence and large-scale data processing.

3. Affected Firms and Markets:

   • Companies like China's Naura Technology Group and Piotech Inc. saw their stock prices drop following the announcement.
   • Japanese chipmakers and related equipment manufacturers, including Advantest, Tokyo Electron, and Disco Corp., saw significant stock gains amid increased demand from markets outside China.

U.S. Motivations:

1. National Security Concerns:

   • The U.S. aims to prevent Chinese companies from using advanced semiconductors in ways that could support military modernisation, weapons programs, or human rights abuses.

2. Tech Competition:

   • Washington accuses China of exploiting U.S. technology to accelerate its domestic semiconductor development.

3. Broader Strategy:

   • The Biden administration is encouraging domestic semiconductor production and reducing reliance on Chinese tech.

China's Reaction:

1. Economic Coercion Allegation:

   • China’s Commerce Ministry called the actions “economic coercion” and protested the extraterritorial application of U.S. laws, especially on non-U.S. firms using American technology.

2. Accelerating Domestic Efforts:

   • China has ramped up its investment in domestic chipmaking, despite trailing global leaders in some areas of the industry.

Market Impact:

1. Positive for Non-Chinese Suppliers:

   • Companies in Japan, South Korea, and other nations supplying chip-making tools may benefit as demand shifts away from Chinese firms.
   • Stock prices of major Japanese and American chip-related firms rose significantly after the announcement.

2. Challenges for Chinese Tech:

   • Chinese chipmakers face increased hurdles, which could slow their technological progress and exacerbate supply chain issues.

Conclusion:

The expanded U.S. export controls mark another step in the tech rivalry between the U.S. and China, with significant implications for global semiconductor markets.

While this policy strengthens U.S. efforts to secure its technological edge, it also accelerates China's drive for self-reliance in high-tech industries, ensuring this competition remains a focal point of global geopolitics.
Source: AP
Image: Deccan Chronicle