U.S. firms banned from supplying Chinese smartphone chip maker

U.S. firms banned from supplying Chinese smartphone chip maker

U.S. firms banned from supplying Chinese smartphone chip maker

In an attempt to cut off a Chinese state-backed semiconductor maker from U.S. exports of components, software and technology goods, . the U.S. Commerce Department has placed trade restrictions on Fujian Jinhua Integrated Circuit, . adding it to a list of entities that can not purchase such products from U.S. firms.

"When a foreign company engages in activity contrary to our national security interests, we will take strong action to protect our national security", Commerce Secretary Wilbur Ross said in a statement.

ZDNet also notes Micron Technology, a USA company, is now in a legal battle with Fujian Jinhua and its Taiwanese partner United Microelectronics Corp, claiming they stole its chip designs. Negotiations have reportedly stalled ahead of a planned meeting between USA and Chinese Presidents Donald Trump and Xi Jinping on the sidelines of the upcoming G20 summit in Argentina.

UMC countered with patent infringement lawsuits against Micron in the mainland China courts in January of 2018 and things went badly for the US. The company has now been put on what is known as an Entity List, which will require Jinhua to apply for a license in order to receive United States exports of commodities, software, and technology.

The Commerce Department said that ZTE lied to American officials about punishing employees who violated USA sanctions against North Korea and Iran. Meanwhile, Jinhua is embroiled in a court battle with US chip maker Micron Technology Inc., which accuses the Chinese company of stealing its technology.

The action against Fujian Jinhua is likely to ignite new tensions between Beijing and Washington since the company is at the heart of the "Made in China 2025" program to develop new high-technology industries. The countries have imposed tariffs on about US$360 billion worth of two-way trade.

It's unclear how much of this concern is legitimate, but either way, the Department of Commerce has officially made Fujian Jinhua a no-go for USA companies, which could hinder its ability to manufacture DRAM.

Linley Gwennap, a chip expert and president of the Linley Group, said Fujian Jinhua was a relatively new company building DRAM as part of China's larger plan to become self-sufficient at making such chips.

Related news