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The United States hit even little-known Chinese startups with the latest sanctions.

Published: 2022-12-22

US authorities have spent a lot of time studying supply chains in the Chinese semiconductor industry, and the new package of sanctions imposed on semiconductor companies from the Middle Kingdom has a precisely calculated basis. Even little-known startups from among those with potential in the semiconductor industry fell under the new restrictions.

For example, PXW Semiconductor Manufactory, along with 35 other companies, was blacklisted. American businesses are prohibited from exporting goods without first obtaining permission from Washington, which is usually almost impossible to achieve. According to one of the experts, what is happening is reminiscent of 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 the Taiwanese chip developer VIA Technologies, was also added to the “black list”. A startup from China was going to present an alternative to Intel processors, but also "got on the radar." The U.S. is seeking a "detailed understanding" of Chinese industry, including looking at companies little known to the public, according to one U.S. government source.

Of course, more well-known players are also on the list - Yangtze Memory Technologies, the largest manufacturer of memory chips in China, which may have to completely withdraw from the market for modern 3D NAND products 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 that can compete with the products of the Dutch ASML. The Integrated Circuit Research and Development Center, allegedly associated with Huawei, also came under restrictions. In Huawei itself, communication is excluded.

Washington paid 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 now will not be able to get technology from British Arm, American Cadence and Synopsys and order production from Taiwanese TSMC. According to experts, other startups can expect a similar fate - a lot of Chinese companies are engaged in chip design, and which of them will fall under US sanctions, one can only guess.

The US began actively persecuting Chinese business back in 2019 with the introduction of restrictions on Huawei and its subsidiaries. Since then, many technology companies from China have been blacklisted, including manufacturers of chips, video surveillance systems, drones, smartphone manufacturers and entities supplying equipment and electronics to the Chinese military.

Some of the companies that came under last week's restrictions are more recent and much more vulnerable to the US government than Huawei. However, according to the latest data, Huawei is also experiencing serious difficulties - the stocks of chipsets for smartphones of its own design have run out in the company's warehouses.

In the US, they prefer to overestimate potential competitors rather than underestimate them, carefully studying the data on each of the more or less significant businesses. The same PXW is funded by the Shenzhen government, its leader is one of the former top managers of Huawei. The startup ordered equipment from a number of American companies, but now it looks like it will never receive it.