ibusinesslines.com November 14, 2018

US Restricts Exports to Chinese Semiconductor Firm Fujian Jinhua

02 November 2018, 09:56 | Kelvin Horton

Trump hits Chinese chipmaker with export ban, still expects ‘great deal’ with Beijing

US bans exports to Chinese DRAM maker citing national security risk

Trump said that there is national security concerns and a statement released by the U.S. Department of Commerce (DoC), officials said the Chinese chipmaker posed "a significant risk of being or becoming involved, in activities contrary to the national security or foreign policy interests of the United States".

On Monday, the US Commerce Department said Fujian Jinhua Integrated Circuit Company would not be able to buy components from American companies without a special license, reports CNN.

However, that production "threatens the long term economic viability of U.S. suppliers of these essential components of USA military systems", the Commerce Department said. Micron Technology, a computer memory company in Idaho, accused Jinhua previous year of stealing intellectual property.

Have breaking news sent to your inbox. He has imposed tariffs on a $250 billion list of Chinese exports.

In a similar move earlier this year, the department blocked sales of component to different Chinese companies including ZTE Corporation. While the Commerce decision helps Micron in the short term, the administration is trying to set a precedent for how it treats Chinese state-owned enterprises in the long run, he said. The U.S. will not resume trade negotiation with China if the Chinese are not willing to address these issues.

Micron, a maker of memory chips with factories in Virginia and Utah, has accused Fujian Jinhua and Taiwanese partner United Microelectronics Corp of stealing its chip designs in a lawsuit in California.

It is the latest front in a simmering trade war between the world's two largest economies.

Jinhua, backed by the government of its home province of Fujian, is one of several companies China is trying to mold into a world-class semiconductor industry player. Microchips are also crucial for things like advanced weapons systems and supercomputers, and the administration is anxious that as China's chip-building prowess grows, so too will its military might.

But it needs American components and manufacturing equipment to fulfill that vision. Commerce Secretary Wilbur Ross noted that the State would ban USA firms from exporting software and technology goods to the Chinese chipmaker.

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