The US added seven Chinese supercomputing firms to a list of entities banned from receiving exports from American companies, citing activities contrary to the national security or foreign policy interests of the US.
The companies were added to the so-called Entity List, which prohibits American firms from doing business with them without first obtaining a US government licence, the commerce department said in a statement on Thursday. The new entities are involved either with building supercomputers used by China’s military actors, its military modernisation efforts or weapons of mass destruction.
The entities are Tianjin Phytium Information Technology, Shanghai High-Performance Integrated Circuit Design Centre, Sunway Microelectronics, the National Supercomputing Centre Jinan, the National Supercomputing Centre Shenzhen, the National Supercomputing Centre Wuxi and the National Supercomputing Centre Zhengzhou, the commerce department said. Shares in Phytium suppliers including China Great Wall Technology Group and Taiwan’s Alchip Technologies fell as much as 10% on Friday.
“Supercomputing capabilities are vital for the development of many — perhaps almost all — modern weapons and national security systems, such as nuclear weapons and hypersonic weapons,” commerce secretary Gina Raimondo said in the statement. “The department of commerce will use the full extent of its authorities to prevent China from leveraging US technologies to support these destabilising military modernisation efforts.”
Thursday’s action doesn’t fully cut off the Chinese firms from US technology. That differs from the action taken against Huawei Technologies, where the government applied the so-called foreign direct-product rule to restrict Huawei’s ability to use Taiwan’s TSMC and others to fabricate their chips.
The commerce department’s move will not prevent Phytium from continuing to source from TSMC, a person familiar with the matter said. — Reported by Eric Martin, (c) 2021 Bloomberg LP
