(Bloomberg) — The Biden administration is considering imposing sanctions on several Chinese technology companies, including memory chip maker Changxin Memory, to limit the development of advanced semiconductors in the Asian country, according to people familiar with the matter.
The U.S. Department of Commerce’s Bureau of Industry and Security is considering adding Changxin to the so-called “entity list,” which restricts companies from accessing U.S. technology, people familiar with the matter said. Requests to remain anonymous because the conversations are private. The Bank for International Settlements is also considering restricting five more Chinese companies, people familiar with the matter said, but stressed that the list was not final.
Changxin (CXMT) makes chips used in a variety of products, including computer servers and smart cars. It competes with US-based Micron Technology Co., South Korea’s Samsung Electronics Co. and SK Hynix Corp. Micron funds an advocacy group that has long pushed for restrictions on CXMT.
The Bank for International Settlements and the White House National Security Council declined to comment.
“We actively support and promote free and fair competition,” Changxin Storage said in a statement. “Our commitment to this principle is reflected in our strict compliance with all relevant laws and regulations, including U.S. export regulations.” The company emphasized that its chips are used in “everyday consumer products, with a special focus on civilian and commercial applications.”
U.S. House Foreign Affairs Committee Chairman Michael McCaul of Texas said in an interview this week that the potential sanctions were a response by President Joe Biden’s administration to Huawei Technologies Co.’s chip breakthrough last year. He said the Ministry of Commerce was considering imposing sanctions on a number of companies, but did not name Changxin Storage.
Huawei launched a 5G phone last year that uses advanced 7-nanometer semiconductors made in China. This was hailed as a major breakthrough, considering the Trump administration cut Huawei off from the world’s leading chipmakers in 2020 over national security concerns.
The phone, launched during a visit to China by U.S. Commerce Secretary Gina Raimondo in August, marked a development in the country’s chip industry that exceeded expectations. In response, Raimondo vowed to take the “strongest possible” actions to protect U.S. national security.
Read more: China is secretly turning Huawei into a powerful chip warfare weapon
The Biden administration has stepped up efforts to use the Commerce Department’s Entity List to block Chinese companies from accessing the latest U.S. technology. U.S. suppliers are prohibited from selling certain advanced products, equipment and parts to customers on the list unless they receive special permission from the Department of Commerce.
Several major Chinese technology companies have been hit by these sanctions, including Shenzhen-based Huawei, its chip manufacturing partner Semiconductor Manufacturing International Corp. and lithography machine maker Shanghai Microelectronics Equipment Group Co., Ltd. In 2022, Changxin Memory’s memory chip peer, Changjiang Memory Technology Company, has been added to the list.
Read more: US urges allies to further squeeze China on chip technology
In addition to the blacklist, the United States has also urged allies to work more closely to contain China’s rise. The Biden administration is urging the Netherlands, Germany, South Korea and Japan to further tighten restrictions on China’s access to semiconductor technology.
(Update from CXMT’s response in fifth paragraph.)
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