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U.S. Imposes Sanctions on China's CETC Chip Arm

The U.S. Department of Commerce has added CETC Chip Technology and other Chinese companies to its Entity List. The move is part of the ongoing clash between the U.S. and China over semiconductor technology. The sanctions could have a significant impact as chips are often made using U.S. technology.

Among the newly sanctioned entities is CETC Chip Technology, one of China's largest military vendors. This move comes as the U.S. and China continue to clash over semiconductor technology.


A total of 37 companies have been added to the trade restriction list, including prestigious research institutes such as the Beijing Academy of Quantum Information Sciences and the Shanghai Center for Quantum Science Research. These institutes are affiliated with the state-owned China Electronics Technology Group Corporation (CETC).


The inclusion of CETC Chip Technology on the Entity List is not the first time the U.S. has targeted the defense conglomerate. Last year, the Biden administration blacklisted CETC for its involvement in supporting the People's Liberation Army's aerospace program. Since 2018, at least 20 CETC subsidiaries have been added to the Entity List, making it more challenging for U.S. suppliers to conduct business with them.


The impact of these sanctions could be far-reaching, as chips are often manufactured using U.S. technology, even when produced abroad. Clif Burns, senior counsel at Crowell & Moring, believes that more sanctions may be on the horizon. He stated, "I think we can expect [more sanctions to come]."


However, some experts warn that these actions may have unintended consequences. Clif Burns points out that the global economy relies on Chinese supplies and products, so imposing restrictions could harm the U.S. as well. This move is part of the U.S.'s broader strategy to maintain technological dominance and slow down China's rise.


In addition to CETC, other Chinese companies, including surveillance giants Hikvision and Dahua, have also faced sanctions as the U.S. seeks to solidify its technological hegemony. The U.S. has also been urging its allies, such as Japan and the Netherlands, to implement similar restrictions on the export of advanced chip tools to limit China's access.


China, in response to these actions, has been actively bolstering its chip industry to achieve self-reliance. The country has been increasing its investments in research and development domestically to reduce its dependence on foreign chips. CETC has played a crucial role in expanding research efforts and integrating state-owned tech firms.


This move by the U.S. follows its previous decision to block American technology supplies to Chinese phone maker Huawei in 2020. The concerns were related to Huawei's alleged links to the military, which the company has vehemently denied. In response, Huawei is establishing a massive semiconductor equipment research and development center in Shanghai to counter the U.S. restrictions.


CETC Chip Technology, headquartered in Chongqing, specialises in the production of silicon-based analog semiconductor chips, modules, and related products. The company employs approximately 12,000 staff and is involved in various sectors, including 5G and lithium battery businesses.

 
  • The U.S. Department of Commerce has added CETC Chip Technology and other Chinese companies to its Entity List.

  • The move is part of the ongoing clash between the U.S. and China over semiconductor technology.

  • The sanctions could have a significant impact as chips are often made using U.S. technology.


Source: ASIA NIKKEI

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