US Adds 36 Companies Including Chinese Semiconductor Firms YMTC and SMIC to Blacklist

[Asia Economy Reporter Jeong Hyunjin] On the 15th (local time), the U.S. Biden administration placed 36 Chinese companies, including Yangtze Memory Technologies Co. (YMTC), on the blacklist.

According to Bloomberg News and others, the U.S. Department of Commerce announced that it would effectively add 36 Chinese companies to the 'Entity List,' a de facto blacklist for export controls, effective on the 16th. The list includes China's leading memory semiconductor companies such as YMTC, SMIC, Changxin Memory, and Shanghai Micro Electronics Equipment (SMEE).

[Image source=AP Yonhap News]

The Department of Commerce specifically included 21 companies, including Cambricon, which develops high-performance artificial intelligence (AI) chips, under the so-called Foreign Direct Product Rule (FDPR), which prohibits acquiring U.S. technology from other countries.

The U.S. Department of Commerce explained that this measure is based on the announcement made in October. Previously, in October, the Department announced export control policies on advanced semiconductors, AI semiconductors, and certain semiconductor equipment to China, placing more than 30 Chinese companies, including YMTC, on the 'Unverified List' due to difficulties in verifying whether they pose a threat to U.S. national security.

Companies on the Unverified List must provide detailed information about the end users of their products during a 60-day verification process to the U.S. government. If it is determined that there is no issue with U.S. national security, the companies are not placed on the blacklist. Most Chinese companies appear to have failed to pass this process.

The U.S. Department of Commerce stated, "We have determined that these companies are acting contrary to the national security or foreign policy interests of the United States," adding, "We aim to strictly limit China's ability to use powerful and commercialized technologies such as AI and advanced computing for military modernization and human rights abuses in the interest of national security."

Once included on the export control list, U.S. companies must obtain special licenses to conduct transactions with these companies.

This content was produced with the assistance of AI translation services.