The Trump administration has launched a new salvo in its escalating trade war with China by adding Fujian Jinhua Integrated Circuit, a state-backed company, to a list of businesses that may not buy components from USA firms.
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. The Trump administration has slapped billions of dollars in tariffs on Chinese imports, claiming the country is stealing U.S. technology.
DoC officials are now barring United States companies from selling any products to Fujian Jinhua, which was recently nearing completion of a new dynamic random access memory (DRAM) factory project.
The stand-off between the world's two superpowers continued this week as the United States banned exports to a Chinese tech manufacturer on national security grounds.
The action is similar to a Commerce Department move that almost put Chinese telecommunications equipment company ZTE Corp out of business earlier this year by cutting it off from U.S. suppliers. Micron has repeatedly accused Fujian Jinhua of stealing its trade secrets.
Jinhua, backed by the government of its home province of Fujian, is one of several companies China is trying to mold into a world-class semiconductor industry player.
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The Commerce Department action comes amid the escalating trade war over market access and the transfer of technology secrete between the United States and China.
UMC counter-sued in China, and in July 2018, the Fuzhou Intermediate People's Court blocked Micron from the Middle Kingdom.
Calls to Fujian Jinhua's offices rang unanswered Tuesday and there was no immediate response to an inquiry made through their website. "Placing Jinhua on the Entity List will limit its ability to threaten the supply chain for essential components in our military systems", said Wilbur Ross, Secretary of Commerce.
China established Jinhua in February 2016 in a bid to make its own home-produced chips, with the firm investing 37 billion yuan ($5.6 billion) that year to build a production line.
However, that production "threatens the long term economic viability of U.S. suppliers of these essential components of U.S. military systems", the Commerce Department said.