Chinese chip maker added to entity list

The US Department of Commerce has added Chinese semiconductor manufacturer Fujian Jinhua Integrated Circuit Company, Ltd (‘Jinhua’) to the Entity List (under the Export Administration Regulations, ‘EAR’), because, Commerce says, it ‘poses a significant risk of becoming involved in activities that are contrary to the national security interests of the United States.’

Commerce says Jinhua is ‘nearing completion of substantial production capacity for dynamic random access memory (DRAM) integrated circuits. The additional production, in light of the likely U.S.-origin technology, threatens the long-term economic viability of U.S. suppliers of these essential components of U.S. military systems.’

Commerce Secretary Wilbur Ross said: ‘When a foreign company engages in activity contrary to our national security interests, we will take strong action to protect our national security. Placing Jinhua on the Entity List will limit its ability to threaten the supply chain for essential components in our military systems.’

The company has been accused, in a California lawsuit, by a US chip manufacturer, Micron, of (with a Taiwanese partner, United Microelectronics) stealing intellectual property. A Chinese counter-suit resulted in the Chinese government blocking Micron from selling its property in China.

The BIS notes that ‘as a result of adding Jinhua to the Entity List, a license is required for all exports, re-exports, and transfers of commodities, software and technology subject to the EAR to Jinhua. Such license applications will be reviewed with a presumption of denial.’

For further information, see:
https://www.commerce.gov/news/press-releases/2018/10/addition-fujian-jinhua-integrated-circuit-company-ltd-jinhua-entity-list