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Fujian Jinhua Reportedly Stopping Production Months After US Killed Exports to Chinese DRAM Maker (Update)

(Image credit: Nor Gal/Shutterstock)

Update, 1/30/19, 8:45 a.m. PT: The Financial Times has reported that Fujian Jinhua will stop production in March as a result of the U.S.' export restrictions. According to FT, which cited two people familiar with the DRAM maker's dealings, Fujian Jinhua is "rapidly running out of imported materials vital for keeping its fabrication plant running."

Original article, 10/30/18, 7:12am PT:

There's some more economic drama (pun intended) rising between the U.S. and China. The U.S. Department of Commerce announced yesterday that U.S. companies will no longer be allowed to export goods to a Chinese DRAM maker called Fujian Jinhua Integrated Circuit Company because it believes the company "poses a significant risk of becoming involved in activities that are contrary to the national security interests of the United States."

The announcement follows increasing tensions between the U.S. and China. Earlier this year the U.S. threatened to enforce tariffs on $34 billion worth of Chinese goods. That figure quickly grew to $200 billion as the list of affected products was updated, and many have feared that the tariffs could lead to higher prices for tech products or even hinder the U.S. semiconductor industry (although we don't know for sure how tech products will be affected).

But the restriction of exports to Fujian Jinhua actually relates to a much older problem: Accusations of Chinese businesses stealing American trade secrets to shift the balance sheets (and balance of power) in their favor. Micron has repeatedly accused Fujian Jinhua of stealing its trade secrets.
The U.S. government didn't specifically mention Micron in its announcement but seems that to be taking action against such possibilities. 

The department explained:

"Jinhua is nearing completion of substantial production capacity for dynamic random access memory (DRAM) integrated circuits. The additional production, in light of the likely U.S.-origin technology, threatens the long-term economic viability of U.S. suppliers of these essential components of U.S. military systems."

It's unclear how much of this concern is legitimate, but either way, the Department of Commerce has officially made Fujian Jinhua a no-go for U.S. companies, which could hinder its ability to manufacture DRAM. We'll probably see how the Chinese government responds to this escalation of economic tension from the U.S. in the coming days, weeks and months.