China Relents, Lets U.S. Export Control Inspect 3D NAND Maker YMTC

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The U.S. administration says that the Chinese government allowed U.S. export control inspections of People's Republic's high-tech companies that were placed on its Unverified List in October, according to a report from the Financial Times. This move seems designed to ensure that Chinese 3D NAND company YMTC does not get placed on the Department of Commerce's "Entity List," which would severely damage the company's ability to procure equipment from American companies.  

YMTC and a number of Chinese high-tech companies were placed on the Unverified List in early October because the U.S. government could not verify whether their products (or products made using their products) ended up in the hands of China's military. Once a company is placed on the Unverified List, it has 60 days to prove its products do not break any rules. If the company cannot prove this within 60 days, it is placed on a trade blacklist called the "Entity List" and, in the case of YMTC, is denied the use of any American technology.

Normally, the Chinese government refuses to allow U.S. export controls inspectors access to domestic companies. However, the government made an exception in the case of YMTC and some other firms from Tianxia, most likely because YMTC, and the semiconductor industry in general, is so essential for the country. 

"We are seeing better behavior," Alan Estevez, the US commerce under-secretary for industry and security, said to the Financial Times. "Mofcom has been more forthcoming. […] We are seeing a change in attitude. It’s not the first time we’ve seen a such a change in attitude, so it depends on how long that is sustained."

It's too early to guess what the U.S. export controls inspectors will find, but at least YMTC won't be blacklisted — for now. That said, four leading U.S. makers of wafer fab equipment have already stopped working with YMTC due to the latest export rules imposed by the U.S. government in October, as they needed to get appropriate export licenses from the Department of Commerce. 

If YMTC doesn't get blacklisted and can prove it doesn't supply products for military use, perhaps it will be easier for companies like Applied Materials, KLA, and Lam Research to obtain approval from the U.S. government to continue working with the 3D NAND maker. 

Anton Shilov
Freelance News Writer

Anton Shilov is a Freelance News Writer at Tom’s Hardware US. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.