The Trump administration announced on Tuesday that it is restricting exports to Chinese chipmaker Fujian Jianhua, a move that could stall Beijing’s plans to become a leader in the semiconductor industry.
A statement released by the US Commerce Department said that the firm poses a “significant risk” of involvement in activities that threaten national security.
Jianhua has denied allegations made by US chipmaker Micron Technology that the Chinese company stole trade secrets. US courts have not yet issued a decision on the case.
The Commerce Department move on Monday was not directly related to the prior accusations and focused on Jianhua’s push to increase production capacity of DRAM chips. “The additional production, in light of the likely US-origin technology, threatens the long-term economic viability of US suppliers of these essential components of US military systems,” Commerce Secretary Wilbur Ross said in a statement.
“Placing Jinhua on the Entity List will limit its ability to threaten the supply chain for essential components in our military systems,” Ross added.
The move, which links industrial policy to national security concerns, as was the case with tariffs on steel and aluminum, could be a sign of more actions to come.
“What the US is doing now could spread to anything that is considered high-end technology that the US doesn’t want China to have any more,” Alicia Garcia Herrero, an economist at French investment firm Natixis said, per The Wall Street Journal. “This case is very different from ZTE.”
Herrero was referring to a ban placed on US exports to Chinese telecommunications equipment maker ZTE, which was imposed in response to noncompliance with US penalties for North Korea sanctions violation.