The US authorities have spent a lot of time studying the supply chains in China’s semiconductor industry, and the new package of sanctions imposed on the Middle Kingdom’s semiconductor companies has a precisely calculated basis. Little-known startups among those with potential in the semiconductor industry also fell under the new restrictions, according to the Financial Times.
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For example, PXW Semiconductor Manufactory, along with 35 other companies, was blacklisted. American companies are prohibited from exporting goods without first obtaining permission from Washington, which is usually nearly impossible to obtain. According to one of the experts, what is happening resembles the popular game “kill the mole”: as soon as the United States imposes restrictions on some Chinese companies, new ones immediately appear.
Hefei Core Storage Electronic, founded by a former employee of Taiwanese chip developer VIA Technologies, was also added to the “blacklist”. A Chinese startup was about to present an alternative to Intel processors, but also “got on the radar”. The US is seeking a “detailed understanding” of Chinese industry, including looking at companies little known to the public, according to a US government source.
Of course, better-known players were also on the list: Yangtze Memory Technologies, the largest memory chip maker in China, which, perhaps, they have to go completely from the advanced 3D NAND market by 2024. Washington intends to prevent the well-known Shanghai Micro Electronics Equipment, China’s main hope for the production of its own lithographic machines capable of competing with the products of the Dutch ASML. The Integrated Circuit Research and Development Center, allegedly associated with Huawei, has also been placed under restrictions. In Huawei itself, communication is excluded.
Washington has been paying attention to Chinese chip developers. For example, Cambricon Technologies and nine of its subsidiaries suffered. The company was founded by Alibaba and the Shanghai government and will now be unable to obtain the technology from British Arm, American Cadence and Synopsys and order production from Taiwanese TSMC. According to experts, other startups can expect a similar fate: many Chinese companies are engaged in chip design, and which of them will fall under US sanctions, one can only guess.
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The United States began actively persecuting Chinese companies in 2019 with the introduction of restrictions on Huawei and its subsidiaries. Since then, many Chinese technology companies have been blacklisted, including makers of chips, video surveillance systems, drones, smartphone makers, and entities supplying equipment and electronics to the Chinese military.
Some of the companies that have been subject to last week’s restrictions are newer and much more vulnerable to the US government than Huawei. However, according to the latest data, Huawei is also experiencing serious difficulties – the company’s warehouses have run out stocks of chipsets for smartphones of our own design.
In the US, they would rather overestimate potential competitors than underestimate them by examining the data on each of the more or less significant businesses. PXW itself is funded by the Shenzhen government, its leader is one of Huawei’s former top managers. The startup has ordered equipment from a number of US companies, but now it appears it will never receive it.
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