Tuesday, October 30th 2018
US Bans Exports to Chinese DRAM Maker Fujian Jinhua Citing National Security Interests
The United States government, via the Department of Commerce, has banned all exports from national companies to China-based Fujian Jinhua Integrated Circuits Ltd. The ban, citing "significant risk of becoming involved in activities that are contrary to the national security interests of the United States", demands that a license is required for "all exports, re-exports, and transfers of commodities, software and technology (...) to Jinhua." It then adds that these license applications will be reviewed - always - with a presumption of denial.
According to the announcement, Jinhua is nearing completion of substantial production capacity for DRAM memory (which it is; the company is finishing construction of a $5.7 billion factory in China's Fujian Province). The announcement then goes on to say that this additional production, which is supported by "likely U.S.-origin technology", referring to the patent war going on between Fujian and Idaho-based Micron, threatens the long term economic viability of U.S. suppliers of these essential components of U.S. military systems. And of course, any company looking to produce modern semiconductors essentially has to have access to products and tools that are only available via US companies - which means that either construction of the Fujian facility is finished, or the company will have a hard time bringing it to production status, thus burying the funds already invested.
According to Washington trade lawyer Douglas Jacobson, quoted by Reuters, the use of the "entity list" - where Fujian now finds itself and which bans exports pending review - to protect the economic viability of a U.S. industry appears to be unprecedented, adding that "This appears to be a dramatic expansion of the use of the entity list for economic purposes."
As an addendum, this likely won't favor - at all - DRAM pricing for the end-user. Additional production capacity would increase available supply, and that might not be in the cards anymore, at least from Fujian, following this move by the US government.
Sources:
Commerce.Gov, NY Times, Reuters
According to Washington trade lawyer Douglas Jacobson, quoted by Reuters, the use of the "entity list" - where Fujian now finds itself and which bans exports pending review - to protect the economic viability of a U.S. industry appears to be unprecedented, adding that "This appears to be a dramatic expansion of the use of the entity list for economic purposes."
As an addendum, this likely won't favor - at all - DRAM pricing for the end-user. Additional production capacity would increase available supply, and that might not be in the cards anymore, at least from Fujian, following this move by the US government.
19 Comments on US Bans Exports to Chinese DRAM Maker Fujian Jinhua Citing National Security Interests
In the short term DRAM prices may not go down, in fact they may just shoot up especially if China isn't able to export their production.
Projections : www.statista.com/statistics/796500/china-big-data-market-size/
Anyway who builds a near $6 billion plant just for domestic consumption, especially from China :rolleyes:
Which is exactly what they want because Phones do not use the fastest memory, and I doubt the Chinese DRAM can reach speeds similar to Samsung anyway.
This means, that nothing can go FROM USA TO China.
But, DRAM manufactured in China CAN go to USA. It does not say Import has been banned.
China has all the knowhow how to make DRAM and they have all the components needed (China is the biggest silicone supplier).
So this ban does nothing in general. China can still build the factory and sell production worldwide, it just can't get help/support/materials or whatever from US. Which i doubt they even needed that.
That's not true either, there is a litigation pending between Micron & UMC+Fujian Jinhua Integrated Circuits for stealing trade secrets.
"... Department of Commerce has taken action to restrict exports to Fujian Jinhua Integrated Circuit Company, Ltd. ..."
"Placing Jinhua on the Entity List will limit its ability to threaten the supply chain for essential components in our military systems." --Wilbur Ross, Secretary of Commerce
But that doesn't make any sense. How is exporting to Fujian a threat to US "military systems?"
And look at the time line: notice published on October 29, effective October 30.
Its so incredibly obvious, I can't see how people miss it. That doesn't mean nothing from China is bad, but right now there is a witch hunt going on with no basis, and only very rare or unseen evidence. There's clearly a hammer looking for new nails to slam, and the hammer is called USA. Meanwhile, China simply wants business as usual, stability and growth. Take some time to absorb those two ideas and put them in the context of any Western originating China news. These bans are highly questionable.
Why is the Pentagon not being forthcoming about technical details? Probably because the NSA is using the same exploits to spy on China.
This is off topic though. I still don't understand how exporting to Fujian is a security threat.
2. exporting to Fujian is like exporting your creditcard and ssn because they just want to know it, since its you dont understand what a glodal security threat is, you should be fine with the results. :eek:
Edit: Just ran across this article which may explain why USA is doing what it can to styme Chinese tech companies:
China exports its restrictive internet policies to dozens of countries: report"Equipment" for internet censorship not unlike the Great Firewall of China.
Of course, when the U.S. banned the export of Xeon chips to China for their supercomputers, it responded by developing their own chips (based on the Alpha design from the U.S. originally). So no doubt they will try to make homegrown technology for this purpose, if they can't get it from Japan or Korea.
trog
www.justice.gov/opa/pr/prc-state-owned-company-taiwan-company-and-three-individuals-charged-economic-espionage