Friday, 16 November, 2018

China urges U.S. 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
Orlando Vargas | 02 November, 2018, 09:52

The limits announced Monday reflected official concern Chinese competition might drive some American technology suppliers out of business and leave the United States without sources of components needed by the military.

The U.S. Administration is planning to propose by early December tariffs on "all remaining Chinese imports" if an upcoming summit between the president and his Chinese counterpart Xi Jinping fails to reach an agreement on the sidelines of the G20 summit in Buenos Aires in November.

The Commerce Department appeared to side with Micron in its statement, claiming that the "likely USA -origin technology" to be produced at the new Fujian plant would threaten "the long term economic viability of US suppliers of these essential components of USA military systems". The company will face additional license requirements to obtain USA technology. It said such applications "will be reviewed with a presumption of denial".

Now, the Trump administration is taking action "in light of the likely USA -origin technology" that "threatens the long term economic viability of US suppliers of these essential components of US military systems".

The administration is concerned the Chinese firm could flood the market with cheap chips that are also made by USA companies that supply the US military.

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

Earlier this year, Washington banned Chinese telecom and smartphone giant ZTE from purchasing crucial USA components for seven years, threatening its survival, as punishment for breaking United States export controls.

The first was ZTE after the company was caught exporting products to Iran and North Korea. The ban was lifted in July after ZTE paid a $1 billion fine and agreed to oversight measures.

The move comes after US-based Micron Technology accused the Chinese company of conspiring to obtain its trade secrets. Micron went to the federal district court of northern California to accuse UMC of hooking up with Jinhua to build a DRAM lab, and headhunting Micron staff (who brought intellectual property with them, Micron alleged) to run it.

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