TECH NEWS – The United States is preparing to impose further sanctions on China, this time targeting its memory chip manufacturers.

The U.S. is drafting legislation that would target Chinese memory chip manufacturers. Under a new proposed regulation, the use of YMTC and CXMT in government products would be banned. Due to the DRAM shortage, the integration of Chinese memory into consumer products has recently been debated. The three largest manufacturers are busy meeting corporate demand, which leaves them with little capacity to produce consumer products. One of the main reasons companies like CXMT can’t supply DRAM chips to mainstream manufacturers is US legislation, which appears to be a serious problem in the near future. Under new regulations issued by the Federal Acquisition Regulation Council (FAR), chips from CXMT, YMTC, and SMIC will be excluded from commercial products.

“Covered semiconductor product or service” is defined as including semiconductors; products incorporating a semiconductor; and services utilizing a semiconductor that are designed, produced, or provided by SMIC, CXMT, YMTC, or any of their affiliates, subsidiaries, or successors, according to the FAR Council.

This proposed amendment to Section 5949 of the National Defense Authorization Act for Fiscal Year 2023 builds on previous restrictions imposed on products from Chinese chip manufacturers. The FAR Council has developed an operational framework for the ban on Chinese components in commercial products. An important element of the amendment is that the restrictions apply to products valued at $15,000 or less. This includes products in stock, as well as commercial IT and telecommunications services.

The FAR Council recommended thoroughly reviewing all electronic products currently in use. However, if additional products are purchased before December 23, 2027, the new restrictions will not apply to them. The amendment is open to public comment until April 20, meaning the above restrictions have not yet been fully considered. However, this suggests the government intends to reduce the use of Chinese components in government products.

One of the most significant problems with integrating CXMT/YMTC chips into consumer products such as laptops, mobile phones, and PCs is that manufacturers will find it difficult to use chips from Chinese suppliers in environments where government use is prohibited. We’ve heard that major PC manufacturers have contacted CXMT about a potential DRAM collaboration. It will be interesting to see if the negotiations lead to integration.

Source: WCCFTech, Lexology