United States imposes restrictions on Chinese tech firm

United States imposes restrictions on Chinese tech firm

The firm is nearing completion of substantial production capacity for dynamic random access memory (DRAM) integrated circuits, likely to be based on US-technology.

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

The order marks the second USA action this year blocking technology exports to a Chinese buyer.

Observers say the latest restriction against Fujian Jinhua is likely to spark new tensions between the two economic powerhouses, . since the company is at the heart of the "Made in China 2025" program to develop new high-tech industries.

Now, the Trump administration is taking action "in light of the likely USA -origin technology" that "threatens the long term economic viability of US suppliers of these essential components of US military systems".

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The Chinese company was caught up in the legal battle between Micron and UMC. While the Commerce decision helps Micron in the short term, the administration is trying to set a precedent for how it treats Chinese state-owned enterprises in the long run, he said. Meanwhile, Jinhua is embroiled in a court battle with USA chip maker Micron Technology Inc., which accuses the Chinese company of stealing its technology.

The order was issued on Monday, US time. Micron has repeatedly accused Fujian Jinhua of stealing its trade secrets. Micron executive vice president Manish Bhatia said on Friday, technology leaks were "definitely a concern".

In July, Micron was barred from selling some of its products in China after Jinhua and its Taiwanese partner, United Microelectronics, accused Micron of violating their patents. The country is trying to reduce its heavy reliance on chip imports, while building capabilities in a technology that underpins everything from computers to smartphones and connected devices in the home.

"It's pretty much impossible to build a leading-edge fab (semiconductor plant) without buying equipment from these American companies", Gwennap said. As a result of the Commerce Department action, a license is now required for all exports, re-exports and transfers of commodities, software and technology, subject to the Export Administration Regulations.

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