The US administration is considering blacklisting a number of Chinese semiconductor firms linked to Huawei Technologies Co, Bloomberg reported on Wednesday.
Among the companies that could be blacklisted are chipmakers Qingdao Si'En, SwaySure, and Shenzhen Pensun Technology Co, or PST. The Biden officials are also weighing sanctions on China's leading memory chipmaker, ChangXin Memory Technologies Inc, the report said.
"Adding more Chinese companies to the US Entity List is a highly likely event," Jefferies analyst Edison Lee wrote after ChangXin was identified as a potential target. "It is easy to implement and justify, and it will further block certain key Chinese companies from being able to exploit current loopholes in export restrictions."
Beyond companies that actually produce chips, US officials may also sanction Shenzhen Pengjin High-Tech Co as well as SiCarrier, one of the people said, the business news agency said. The concern is that those two companies, which make semiconductor manufacturing gear, are acting as proxies to help Huawei obtain restricted equipment, according to the person. Bloomberg News said it first reported on the companies' ties to Huawei in late 2023.
If it happens, this would be the second big move by the White House to restrict Chinese firms' ambitious plans in AI and semiconductor industry.
In December 2022, in a massive crackdown on China's chip industry, the US blacklisted Chinese memory chipmaker YMTC and 21 major Chinese players in the artificial intelligence chip industry. YMTC was sanctioned over fears it could divert US technology to previously blacklisted Chinese tech giants Huawei and Hikvision.
The move barred YMTC's suppliers from shipping US goods to it without a difficult-to-obtain license. The 21 Chinese AI chip entities added to the trade blacklist, which included Cambricon Technologies Corp and CETC, faced an even tougher penalty, with the US government effectively blocking their access to technology made anywhere in the world with US equipment.
As the Chinese government seeks to remove barriers between its military and civilian sectors, "US national security interests require that we act decisively to deny access to advanced technologies," Assistant Secretary of Commerce for Export Administration Thea Kendler had said in a statement as per Reuters.