U.S. Sets Ban On Export Of Chipmaking Gear To China

The United States is considering limiting shipments of American chipmaking equipment to memory chip makers in China, including Yangtze Memory Technologies Co Ltd. (YMTC), as part of a bid to halt China's semiconductor sector advances and protect US companies, Alexandra Alper and Karen Freifeld reported for Reuters on August 3, 2022.

Photo Insert: YMTC enjoys an annual subsidy of $24 billion from Beijing.

If President Joe Biden's administration proceeds with the move, it could also hurt South Korean memory chip juggernauts Samsung Electronics Co Ltd. and SK Hynix Inc., the sources said, speaking on condition of anonymity.

Samsung has two big factories in China while SK Hynix Inc is buying Intel Corp.'s NAND flash memory chips manufacturing business in China. YMTC enjoys an annual subsidy of $24 billion from Beijing.

The crackdown, once approved, would bar the shipment of US chipmaking equipment to factories in China engaged in the manufacture of advanced NAND chips.

It would mark the first US bid through export controls to target Chinese production of memory chips without specialized military applications and represents a more expansive view of US national security.

The move also would seek to protect the only US memory chip producers, Western Digital Corp. and Micron Technology Inc., which together represent about a quarter of the NAND chips market.

NAND chips store data in devices such as smartphones and personal computers and at data centers for the likes of Amazon, Facebook, and Google. How many gigabytes of data a phone or laptop can hold is determined by how many NAND chips it includes and how advanced they are.

Under the action being considered, US officials would ban the export of tools to China used to make NAND chips with more than 128 layers. LAM Research Corp. and Applied Materials, both based in Silicon Valley, are the primary suppliers of such tools.

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