The U.S. Department of Commerce is weighing a ban on American companies selling advanced chipmaking equipment to Chinese firms, according to two people familiar with the discussions.
The rules would expand on an existing ban on U.S. companies selling such equipment to China’s leading chipmaker, Semiconductor Manufacturing International Corp. The wider ban would affect companies including state-backed Hua Hong Semiconductor, ChangXin Memory Technologies and Yangtze Memory Technologies Corp.
The potential ban is in early stages and could take months to draft. It would escalate technology tensions between the two nations, which have clashed over China’s use of surveillance and facial recognition technology in what U.S. officials have labeled human rights abuses against the country’s Uighur ethinic minority, among other things. China has boosted its efforts to build up its domestic semiconductor industry after U.S. sanctions crippled Huawei Technologies, one of China’s biggest technology companies, by choking off its supply of chips. Beijing sees homemade chips as key to breaking its reliance on Western technology, but it needs chipmaking tools, which are largely made elsewhere.
