U.S. senators Schumer, Warner join calls to blacklist Chinese chipmaker YMTC

U.S. Senate passes legislation to subsidize domestic semiconductor industry
U.S. Senate Majority Leader Chuck Schumer (D-NY) speaks during a news conference after the U.S. Senate passed legislation to subsidize the domestic semiconductor industry, at the U.S. Capitol in Washington, U.S., July 27, 2022. REUTERS/Elizabeth Frantz

Aug 1 (Reuters) - Top Democrats including Senate majority leader Chuck Schumer have joined an effort to place China's fast-growing chip manufacturer, Yangtze Memory Technologies Company (YMTC), on a U.S. trade blacklist.

In a letter to U.S. Commerce Secretary Gina Raimondo dated July 28, Schumer and a half-dozen other senators from both parties described the "growing threat" posed by Chinese semiconductor manufacturers like YMTC to national security and U.S. chip companies.

"By failing to add YMTC to the Entity List, the U.S. Department of Commerce is allowing the PRC to exploit our technological sector and supply sanctioned parties in China," states the letter, which was seen by Reuters on Monday.

U.S. exports to companies placed on the Commerce Department's trade blacklist, formally known as the entity list, are restricted. Huawei Technologies Co Ltd (HWT.UL), a Chinese telecommunications equipment maker, was put on the list in 2019, and the letter said YMTC is supplying them, limiting the effectiveness of the sanctions.

In addition to Schumer, the letter was signed by Democratic Senator Mark Warner, and Republican senators John Cornyn, Marco Rubio, Bill Hagerty, James Risch and Mike Crapo. Rubio and Hagerty wrote letters earlier saying YMTC should be blacklisted.

A spokesperson for the Department of Commerce in Washington confirmed the letter was received and said it would respond. YMTC did not immediately respond to a request for comment.

YMTC produces NAND flash memory chips, which store data in devices such as smartphones and personal computers and at data centers.

The company, which was formed in 2016, accounts for only about 5% of worldwide NAND production, but that is almost double from a year ago, according to industry research.

"YMTC is an immediate threat," the senators wrote in their letter, saying that in its bid to secure market share, YMTC is set to drive industry-wide margins negative and force non-Chinese memory firms to exit the market or consolidate.

Separately, Reuters reported on Monday that the Biden administration was considering limiting shipments of American chipmaking equipment to memory chip makers in China, including YMTC. read more

In response, the Commerce Department said the administration is focused on impairing China's efforts to manufacture advanced semiconductors and was updating its approach and seeking to maximize the effectiveness of export controls.

In their letter, the senators asked Raimondo to bring policy deliberations to a rapid conclusion.

Reporting by Karen Freifeld in New York Editing by Matthew Lewis

Our Standards: The Thomson Reuters Trust Principles.