US extends black list.

In China’s southern tech hub of Shenzhen, employees at the chipmaking start-up PXW Semiconductor Manufactory began to panic after the US put it on a trade blacklist last week. «Most team leaders and executives are in emergency meetings but the rest of us are not allowed to discuss such a ‘sensitive’ matter,» an employee said, adding that their boss’s office door remained closed on Friday, a day after the US added PXW to the «entity list» along with 35 other Chinese companies. US suppliers are barred from exporting to companies on the list without approval, which in most cases would be denied. The US started using export controls to rein in China’s technological rise by putting Huawei on the entity list in May 2019

Washington has since added many more, including surveillance companies, chipmakers, drone developers, smartphone makers and others suspected of supplying the People’s Liberation Army. Some of the companies targeted last week, including PXW, are only just starting to develop their semiconductor businesses and are thus more vulnerable than established groups such as Huawei. Another addition to the list is Hefei Core Storage Electronic, a company founded by former staff of Taiwanese chip design company VIA Technologies to develop a homegrown alternative to Intel-based PC processors. «The US is developing an increasingly detailed understanding of the industry in China, including players you would have considered as obscure,» the official said.

But the list also contains prominent companies. Yangtze Memory Technologies, China’s largest memory chipmaker, was already hit hard. The company had halted its expansion and asked US equipment manufacturers to return downpayments for previously ordered tools, said a senior engineer at YMTC. YMTC had already suspended talks with Apple on supplying memory chips for iPhones in China.

The research company TrendForce predicts it could be forced to exit the market for advanced 3D Nand flash products by 2024 as it has lost critical support from toolmakers to compete with rivals on this particular memory technology. The company’s machines rely on imported components and have never run in mass production. Another key addition is Shanghai Integrated Circuit Research and Development Center, a company believed to be connected to Huawei’s efforts to increase domestic chip manufacturing.

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