U.S. Blacklists Seven Chinese Supercomputing Firms

The U.S. added seven Chinese supercomputing firms to a list of entities banned from receiving exports from American companies, citing activities contrary to the national-security or foreign-policy interests of the U.S.

The companies were added so-called entity list, which prohibits American firms from doing business with them without first obtaining a U.S. government license, the Commerce Department said in a statement on Thursday. The new entities are involved either with building supercomputers used by China’s military actors, its military modernization efforts or weapons of mass destruction.

The entities are Tianjin Phytium Information Technology Co., Shanghai High-Performance Integrated Circuit Design Center, Sunway Microelectronics, the National Supercomputing Center Jinan, the National Supercomputing Center Shenzhen, the National Supercomputing Center Wuxi, and the National Supercomputing Center Zhengzhou, Commerce said. Shares in Phytium suppliers including China Great Wall Technology Group Co. and Taiwan’s Alchip Technologies Ltd. fell as much as 10% Friday.

“Supercomputing capabilities are vital for the development of many—perhaps almost all—modern weapons and national-security systems, such as nuclear weapons and hypersonic weapons,” Commerce Secretary Gina Raimondo said in the statement. “The Department of Commerce will use the full extent of its authorities to prevent China from leveraging U.S. technologies to support these destabilizing military modernization efforts.”

China firmly rejects U.S. attempts to maintain its monopoly over the high-tech industry and contain the nation by over stretching the concept of national security, Foreign Ministry spokesman Zhao Lijian said in a regular press briefing Friday in Beijing.

“U.S. oppression will never stop our progress in high technology,” Zhao said. “It will only make us more determined and resolved in speeding up our innovation.”

Thursday’s action doesn’t fully cut off the Chinese firms from U.S. technology. That differs from the action taken against Huawei Technologies Co., where the government applied the so-called foreign direct-product rule to restrict Huawei’s ability to use Taiwan Semiconductor Manufacturing Co. and others to fabricate their chips.

The Commerce Department’s move will not prevent Phytium from continuing to source from TSMC, a person familiar with the matter said.