The U.S. Department of Commerce has broadened its export control measures, adding 140 Chinese companies to its “Entity List” and restricting their access to critical American technology. The new regulations, which focus on firms involved in semiconductor production, including manufacturers of chipmaking tools, equipment, and related software, were published Monday in the Federal Register and are expected to take effect later this week.
Most of the newly listed companies are based in China, though some are Chinese-owned entities operating in Japan, South Korea, and Singapore. In addition to the expanded Entity List, the U.S. has placed restrictions on exports of high-bandwidth memory chips to China. These chips are vital for processing vast amounts of data in cutting-edge applications like artificial intelligence (AI).
The move has sparked a strong response from China’s Commerce Ministry, which condemned the actions as “economic coercion” and vowed to defend its “rights and interests” without elaborating on specific countermeasures. In an official statement, the ministry accused the U.S. of engaging in non-market practices that undermine global trade norms.
U.S. Commerce Secretary Gina Raimondo defended the decision, emphasizing that the goal was to limit China’s access to advanced technologies that could pose national security risks. Under the new rules, American companies seeking to engage with the listed firms will likely face stringent export license denials, a move that further complicates the business landscape for Chinese tech companies.
The U.S. has steadily expanded its export controls in recent years, with the Biden administration prioritizing the reshoring of semiconductor manufacturing and technology investment. According to Matthew S. Axelrod, Assistant Secretary for Export Enforcement, the aim is to prevent Chinese firms from exploiting U.S. technology to develop advanced semiconductors domestically, which could bolster China’s military and strategic capabilities. He added that the addition of key Chinese semiconductor companies to the Entity List was designed to slow the country’s progress on weapons of mass destruction programs and human rights abuses.
In response, Beijing has accused Washington of pursuing a policy of “technology hegemony,” intensifying pressure on Chinese tech giants such as Huawei and blocking their access to U.S. suppliers. China has also voiced strong opposition to what it calls “long-arm jurisdiction”—a policy that extends export controls to third-party countries, such as South Korea, Taiwan, and Singapore, if their companies use American technology in their chip-making processes.
This escalating tension between the U.S. and China over technology control has spurred China to accelerate efforts to develop its own semiconductor industry. The Chinese government has pumped billions of dollars into research, development, and subsidies, although the country still lags behind in certain technological areas.
The announcement had immediate market repercussions. Shares in Japanese semiconductor equipment makers surged, with companies like Advantest and Tokyo Electron both rising by 4.6%, and Applied Materials increasing by 4.9%. Meanwhile, Chinese firms directly impacted by the new sanctions saw sharp declines. Naura Technology Group, for example, dropped 3%, while Piotech Inc. saw a 5.3% dip.
The expanded export controls underscore the growing tension between the two superpowers as they vie for dominance in the rapidly evolving tech landscape, with semiconductor production at the heart of the competition.
Related topics:
U.S. Imposes New Restrictions on China’s Semiconductor Industry Amid National Security Concerns
US Bitcoin ETFs Poised for Record Inflows Amid Crypto Surge and Trump’s Pro-Crypto Stance
