US Company Suspected of Supplying Spy Balloon Parts Through Chinese Subsidiary

A subsidiary of a U.S. company in China has recently been suspected of supplying electronic components to an organization linked to the reconnaissance balloon incident that escalated U.S.-China tensions.

On the 6th (local time), U.S. NBC reported that AXT's subsidiary in China, located in California, counts the state-owned defense company China Electronics Technology Group Corporation (CETC), which is related to China's reconnaissance balloon program, as its largest customer.

CETC is a company that oversees the 48th Research Institute, one of six Chinese entities sanctioned last month by the U.S. Department of Commerce for supporting the Chinese military's aerospace program shortly after the reconnaissance balloon incident. The 48th Research Institute supplies microelectronic equipment such as solar wafers, cells, and panels both within China and overseas. The U.S. suspects that the 48th Research Institute was responsible for the solar equipment on the reconnaissance balloon. Being designated as a sanctioned entity is considered a threat to U.S. national security and results in strict restrictions on the export of advanced U.S. technology.

According to documents from the U.S. Securities and Exchange Commission (SEC), AXT holds an 85% stake in Beijing Tongmei, its semiconductor parts manufacturing subsidiary in China. AXT's transaction records do not specifically mention CETC affiliates, so it is unclear whether Beijing Tongmei supplied parts to the 48th Research Institute. However, NBC reported that a Chinese technical director who has worked at Beijing Tongmei since 2005 was previously affiliated with CETC.

Founded in 1986, AXT is a company that produces wafers essential for semiconductors used in electronic products such as satellite solar cells, lasers, and sensors. In its early years, it received $2 million (approximately 2.6 billion KRW) in support from the U.S. Department of Defense for technology and product development, and about 20 years ago, it relocated its manufacturing facilities to China.

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