Tue, 16 Aug 2022

US considers crackdown on Chinese memory chip makers

Robert Besser
04 Aug 2022, 15:31 GMT+10

WASHINGTON D.C.: The U.S. is considering limiting shipments of U.S.-made chipmaking equipment to China, including to Yangtze Memory Technologies, according to media reports.

The potential move is part of the efforts of the administration to halt China's semiconductor sector advances and protect U.S. companies.

However, it could also affect South Korean chipmakers with factories in China, including Samsung Electronics, which has two factories in the country, and SK Hynix, which is buying Intel Corp's NAND flash memory chips manufacturing business there.

The shipment of U.S. chipmaking equipment to factories in China that manufacture advanced NAND chips would be barred, if the proposal is approved.

According to export control experts, the move is the first attempt by the U.S. to target China's production of memory chips under a more expansive view of American national security, and aims to protect the only American NAND chip producers, Western Digital and Micron Technology.

NAND chips store data in devices, such as smartphones and personal computers, and at data centers for companies such as Amazon, Facebook and Google.

Sources have said that U.S. officials could ban the export of tools to China used to make NAND chips with more than 128 layers, which are produced primarily by Silicon Valley-based LAM Research Corp and Applied Materials.

Asked to comment on the possible move, a spokesperson for the U.S. Commerce Department, which oversees export controls, did not discuss potential restrictions, but noted that "the Biden administration is focused on impairing China's efforts to manufacture advanced semiconductors to address significant national security risks to the U.S.," as quoted by Reuters.

Yangtze Memory Technologies, founded in 2016, is a rising power in manufacturing NAND chips. Micron and Western Digital are under pressure from Yangtze Memory Technologies' low prices, as the White House wrote in a June 2021 report.

Yangtze Memory Technologies is under investigation by the Commerce Department over whether it violated U.S. export controls by selling chips to Chinese telecoms company Huawei.

Aimed at affecting the operations of Semiconductor Manufacturing International Corporation, China's largest chipmaker, on 8th July Reuters reported that the Biden administration is also considering restrictions on shipments to China of tools to make advanced logic chips.

Last week, the U.S. Congress approved legislation to invest billions of dollars in domestic chip production, aimed at enabling the U.S. to compete with China.

The impact of the potential restrictions on other players in China, such as Intel, which is manufacturing memory chips with 144 layers at the Chinese site, is still unclear.

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