US Orders Halt on Chip Gear Shipments to Hua Hong
The US Department of Commerce instructed several chip equipment firms to stop sending specific tools to Hua Hong, China's second-largest chip manufacturer, as part of its ongoing effort to impede the nation's progress in advanced chip technology, according to two sources with knowledge of the situation.
The department dispatched letters to several companies notifying them of new limitations on tools and other materials intended for two Hua Hong sites that US officials suspect might produce China's most advanced chips, according to the sources.
Major US semiconductor equipment firms Lam Research, Applied Materials, and KLA, all of which have substantial operations in China, were reported to have received a letter, according to reports.
China expects the US to implement tangible measures to ensure the stability and efficient operation of global industrial and supply chains, foreign ministry spokesperson Lin Jian stated on Wednesday in response to a query during a daily press briefing.
In March, Hua Hong Group advanced chip manufacturing technologies capable of producing artificial intelligence chips, marking a significant step in Beijing's push for technological self-reliance.
Sources indicated that Huali Microelectronics, the group's contract chip manufacturing division, was getting ready to implement a 7-nanometer chip production process at its facility in Shanghai. SMIC, the largest contract chip manufacturer in China, is the sole domestic firm capable of producing chips using 7-nm technology.
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Recently, the Commerce Department has limited US firms from sending equipment to Chinese factories that manufacture advanced chips as a measure to protect the US' technological superiority in developing AI and other sophisticated chips for national security reasons.
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The latest letters advance this policy but may raise tensions with China prior to President Donald Trump's upcoming meeting with Chinese President Xi Jinping in Beijing in May.
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US chip equipment firms and other vendors might face billions in sales losses, one individual noted, particularly if they are supplying a chip manufacturing facility that is being built or one that is upgrading to produce more advanced chips. The limitations might hinder China's internal chip production efforts, but Hua Hong could potentially substitute the equipment with alternatives from abroad or within China.