US all set to blacklist 30+ Chinese Companies which also include the 3D NAND Company YMTC

According to DigiTimes, the US government is likely to put China-based 3D NAND company YMTC on the Department of Commerce’s “Entity List” this week, along with dozens of other high-tech companies from the People’s Republic. Companies on the Entity List will be unable to purchase equipment, software, and other technologies from American firms unless the latter obtain a special export license from the Department of Commerce.

As a manufacturer of 3D NAND, YMTC was already hampered by the United States government’s broad restrictions against the Chinese semiconductor industry. Already, YMTC is unable to obtain American wafer fab equipment (WFE) to manufacture 3D NAND with 128 or more layers. As a result, four major US chipmaking tool manufacturers have already stopped working with YMTC because they need to obtain required export licenses from the Department of Commerce.

Being placed on the Entity List complicates matters further for YMTC, as it now loses access to all types of wafer fab equipment built in the United States or containing American IP, software, and other technology.

The US Department of Commerce’s Bureau of Industry and Security (BIS) added Yangtze Memory Technologies Company, along with 30 other entities, to the Unverified List (UVL) in early October because it could not identify bona fides (end users) of their products or whether said bona fides were involved in boosting China’s military capabilities.

At the time, there is a lot of competition. This usually means that the corporation must allow the US Department of Commerce to undertake inspections and verifications. If the checks cannot be completed to the satisfaction of the US DoC, the company is placed on the Entity List.

Although the Chinese government appeared to relent last week, allowing US export control to audit a number of organisations (including YMTC), these inspections take time. Because it appears that they have not yet been finalised, YMTC and the other firms will be placed on the Entity List for the time being.

The Entity List is essentially a blacklist, and being blacklisted is a serious concern since it means YMTC will lose access to any American technologies that are regulated. When Huawei and its subsidiaries were placed on the Entity List, they lost access to software and hardware that used any technology produced in the United States, including chip design software and TSMC chips. This severely limited Huawei’s ability to build system-on-chips and nearly killed its ability to produce them in bulk.

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