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US Bans Exports to Chinese DRAM-Maker

The stand-off between the world’s two superpowers continued this week as the US banned exports to a Chinese tech manufacturer on national security grounds.

As of October 30, Fujian Jinhua Integrated Circuit Company will be added to the Entity List because it poses a “significant risk of becoming involved in activities that are contrary to the national security interests of the United States.”

The Fujian-based DRAM maker is nearing completion of a vast $5.7bn wafer-manufacturing plant, which will help drive the Made in China 2025 strategy of self-reliance. Chips are one key area where the country's leaders believe it is too reliant on US parts at the moment.

However, Fujian Jinhua is currently locked in a legal dispute with main rival, US chip maker Micron Technology over IP theft.

The Commerce Department appeared to side with Micron in its statement, claiming that the “likely U.S.-origin technology” to be produced at the new Fujian plant would threaten “the long term economic viability of U.S. suppliers of these essential components of U.S. military systems.”

“When a foreign company engages in activity contrary to our national security interests, we will take strong action to protect our national security,” said commerce secretary, Wilbur Ross. “Placing Jinhua on the Entity List will limit its ability to threaten the supply chain for essential components in our military systems.”

In many ways the issue represents a microcosm of the overall US-China dispute, in that the former is belatedly reacting to years of state-sponsored IP theft by the latter.

However, cutting off the supply chain is unlikely to change the long-term trend — if anything it will accelerate Xi Jinping’s push for China’s total self-reliance in technology.

The move calls to mind the ban on exports slapped on ZTE after it broke sanctions on sales to Iran and then lied about it. Although temporarily lifted, that imposition could have forced the telecoms firm out of business, it was claimed at the time.

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