US Exempted China DRAM Makers From Controls ‘Under Pressure From Japan’

China’s leading producer of DRAM memory was exempted from the latest round of US sanctions due to pressure from Japan, according to a report from Hong Kong-based The South China Morning Post.

The round of sanctions from the US Department of Commerce’s Bureau of Industry and Security last week added 140 companies to the Entity List trade blacklist, as well as banning sales to China of certain types of chipmaking equipment and semiconductor development software.

But some of China’s largest semiconductor companies, including ChangXin Memory Technologies (CXMT), were not placed on the blacklist, partly due to the influence of Japan, whose leading chipmaking tool producer Tokyo Electron is a major supplier to CXMT, the report said.

The US originally considered putting CXMT and 11 other Huawei Technologies suppliers on the blacklist, according to a Bloomberg report.

Exemptions

US allies Japan and the Netherlands were both exempted from the US Foreign Direct Product Rule, meaning Chinese firms can still buy some chip tools from those countries.

Equipment made in Malaysia, Singapore, Israel, Taiwan and South Korea is, however, subject to the US measure, which imposes controls on foreign-manufactured products that contain US technology.

Japan has introduced export restrictions on 23 types of chip-related equipment and materials to “unfriendly markets”, but Tokyo Electron remains a major supplier to Chinese chip firms.

Revenue from China accounted for 45 percent of the Japanese company’s total sales in the first half of its current financial year beginning 1 April, the firm said last month.

China has been trying to develop domestically produced DRAM, a critical component in smartphones, laptops and servers, and high-bandwidth memory (HBM), important for AI processors.

CXMT is a crucial part of both DRAM and HBM plans and has been gaining domestic market share.

Memory chips

The company last year launched China’s first LPDDR5 DRAM chips which were validated by Chinese smartphone makers including Xiaomi and Transsion.

The US has been trying to restrict China from developing high-end chip production capabilities, while seeking to avoid disrupting its production of commodity chips.

The Biden administration said the latest round of sanctions was “a proactive measure enhancing the Department of Commerce’s work to impede the PRC’s ability to procure and produce the technologies necessary for its military modernisation.”

The latest export restrictions include a new “red flag guidance” to address compliance concerns, and several “critical regulatory changes” to enhance the effectiveness of existing controls.