US mulls blacklisting CXMT to curb China’s chip advance

The Biden administration is weighing sanctions on several Chinese tech companies, including memory chipmaker ChangXin Memory Technologies Inc., according to people familiar with the matter, in a fresh bid to restrain the Asian country’s development of advanced semiconductors. 

The US Commerce Department’s Bureau of Industry and Security is considering adding ChangXin to its so-called Entity List, which restricts companies’ access to US technology, said the people, who asked not to be identified because the conversations are private. BIS is also considering restricting five other Chinese firms, the people said, while emphasizing that the list isn’t final.

ChangXin, or CXMT, makes chips used in a wide range of products, including computer servers and smart vehicles. It competes with US-based Micron Technology Inc. and South Korea’s Samsung Electronics Co. and SK Hynix Inc. Micron funded an advocacy group that has long pushed for CXMT to be restricted.

BIS and White House National Security Council declined to comment.

“We actively endorse and promote free and fair competition,” CXMT said in a statement. “Our commitment to this principle is demonstrated by our strict compliance with all relevant laws and regulations, including US export regulations.” The company emphasized that its chips were used in “everyday consumer products, with a specific focus on civilian and commercial applications.”

The potential sanctions are a response by President Joe Biden’s administration to a chip breakthrough that Huawei Technologies Co. made last year, US House Foreign Affairs Committee Chairman Michael McCaul of Texas said in an interview this week. The Commerce Department is weighing a sanctions package on multiple firms, he said, without naming CXMT. 

Huawei launched a 5G phone last year with an advanced 7-nanometer semiconductor made in China. It was lauded as a significant breakthrough considering that the Trump administration cut off Huawei’s access to leading global chipmakers in 2020 over national security concerns.

The handset — released in August when US Secretary of Commerce Gina Raimondo was visiting China — signaled that the country’s chip industry was further along than expected. In response, Raimondo vowed the “strongest possible” action to protect US national security. 

The Biden administration has stepped up use of Commerce’s Entity List to keep Chinese companies from obtaining the latest American technologies. US suppliers are blocked from selling certain advanced products, equipment and components to customers on the list unless they obtain a special license from the Commerce Department. 

Several key Chinese tech companies are already subject to those sanctions, including Shenzhen-based Huawei, its chipmaking partner Semiconductor Manufacturing International Corp. and lithography machine maker Shanghai Micro Electronics Equipment Group Co. In 2022, Yangtze Memory Technologies, CXMT’s memory-chip peer, was added to the list.

Beyond the blacklisting, the US is urging allies to work more closely together to contain China’s rise. The Biden administration is pressing the Netherlands, Germany, South Korea and Japan to further tighten restrictions on China’s access to semiconductor technology.