US restricts exports to China's Fujian Jinhua

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The Commerce Department said it had put Fujian Jinhua Integrated Circuit Co Ltd on a list of entities that can not purchase components, software and technology goods from U.S. firms.

However, the Commerce Department's export ban could end up limiting the Chinese company's development.

The U.S. Commerce Department is restricting American firms from exporting parts to a Chinese DRAM producer that develops semiconductors.

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The Commerce Department action comes amid the escalating trade war over market access and the transfer of technology secrete between the United States and China. UMC announced that the Fuzhou Intermediate People's Court of the People's Republic of China (PRC) issued a preliminaryinjunction against Micron Semiconductor (Xi'an) and Micron Semiconductor (Shanghai), enjoining Micron from offering to sell, and selling in the PRC 26 DRAM and NAND-related items, including certain solid-state hard drives and memory sticks in China. Chinese entities are often scrutinised on the ground of potential threat to the US economy and national security.

"When a foreign company engages in activity contrary to our national security interests, we will take strong action to protect our national security", said commerce secretary, Wilbur Ross.

Micron, a maker of memory chips with factories in Virginia and Utah, has accused Fujian Jinhua and Taiwanese partner United Microelectronics Corp of stealing its chip designs in a lawsuit in California. Meanwhile, Jinhua is embroiled in a court battle with USA chip maker Micron Technology Inc., which accuses the Chinese company of stealing its technology.

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Now, the Trump administration is taking action "in light of the likely USA -origin technology" that "threatens the long term economic viability of US suppliers of these essential components of US military systems".

UMC counter-sued in China, and in July 2018, the Fuzhou Intermediate People's Court blocked Micron from the Middle Kingdom.

It was not immediately clear what effect the Commerce Department action will have on Fujian Jinhua's operations. That figure quickly grew to $200 billion as the list of affected products was updated, and many have feared that the tariffs could lead to higher prices for tech products or even hinder the USA semiconductor industry (although we don't know for sure how tech products will be affected).

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