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The US Plans On Restricting Chipmaking Equipment Exports To China As A Part Of New Crackdown

The US is not happy with its business partner China and new intelligence reports are speaking of a possible crackdown underway against Chinese chip makers.

The country is restricting the number of shipments going out to firms in the Chinese nation like Yangtze Memory as reported by four unnamed insiders. The decision is being taken by the US after overviewing the whole situation.

America feels the need to restrict advancements of Chinese firms in the semiconductor industry so it can safeguard its own companies and evade risks to its national security.

While there is yet to be any confirmation about the decision passing the Biden administration checkpoint, if that’s the case, then this could signal trouble for China.

Similarly, tech analysts revealed how the decision would even impact firms hailing from South Korea too like those involved in making memory chips like Samsung Electronics.

Speaking while remaining anonymous, one insider source revealed how Samsung has two huge factories located in the country. Hence, if this new crackdown gets approval, it’s a major loss for several firms affiliated with the business deal.

Remember, without the right shipments in place, the equipment for manufacturing won’t be arriving at factories for work in China and that would bar NAND chips.

This would be highlighted as the first ever bid from America that halts exports so as to strategically target various Chinese firms involved in memory chip production.

Similarly, the actions are being seen as one that would even protect America’s best interest as the nation’s only chip manufacturers would have less or no competition to worry about.

The companies Micron technology and another that goes by the name Western Digital Corp would end up representing one-quarter of the chip industry of today.

For those who may not be aware, these NAND chips are usually found inside smart devices and are used for storing data inside phones and PCs. Similarly, you’ll find them at data centers trying to gain access to companies like Amazon, Google, and even Facebook.

So how much data can a device hold is actually outlined by such chips in the market today.

Therefore, such moves taken by the US government would indirectly ban exports of various tools that are the raw materials used to make the final product.

The report says that the Biden administration has only just begun to oversee the matter and hence it’s going to be a while until we finally witness a bold decision with its respective regulations.

Meanwhile, there are some speculations about how the US and China are still trying to figure things out and make their relationship work. The Biden administration is keener on fixing strained relations and working toward discussing any reservations that they may be having in regard to risks to the country’s national security.

China’s YMTC is a strong competitor that puts American chipmaking firms under pressure as China’s low prices are bound to attract more clients than others. Some rumors spoke about how the Chinese firm even went as far as supplying its chips to other Chinese Telecom companies that went against the current US deal’s regulations. Hence, an investigation is underway.


H/T: Reuters

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