Chinese Chip Firms Say They Can Withstand New U.S. Export Curbs

Chinese chip companies targeted by Washington’s new export controls are accelerating supply chain localization and maintaining production, thanks to efforts to stockpile equipment, Eduardo Baptista and Heekyong Yang reported for Reuters.

The restrictions aim to limit China's access to chips that could enhance AI for military purposes or pose national security risks.

The latest US restrictions, the third in three years, focus on chipmaking equipment, software, and high-bandwidth memory.

They affect exports to 140 companies, including Naura Technology Group and ACM Research. Empyrean, a maker of electronic design automation (EDA) tools, stated that its inclusion on the list would have little impact on its operations.

Surprisingly, ChangXin Memory Technologies (CXMT), China's leading manufacturer of a key AI chip component, was not included on the restricted list.

The Biden administration explained that the restrictions aim to limit China's access to chips that could enhance AI for military purposes or pose national security risks. Shares of some South Korean suppliers to CXMT rose after its exclusion, as analysts suggested the decision brought short-term relief to South Korea's chip sector.

"The development has brought short-term relief to South Korea's chip sector, as their China-bound revenue is unlikely to be significantly affected for now," said Ryu Young-ho, an analyst at NH Investment & Securities. CXMT has not commented on the matter.