(Bloomberg) — US lawmakers are urging Washington to strike back against China for its decision to bar Micron Technology Inc.’s memory chips, threatening to further inflame tensions between the two countries.
Representative Mike Gallagher, a Wisconsin Republican who leads a China-focused congressional committee, wants Changxin Memory Technologies Inc. placed on a blacklist that effectively bars dealings with American firms. That’s in response to Beijing this week blocking Micron from supplying Chinese critical infrastructure on national security grounds, an unusual move that’s already ignited accusations of over-reach.
Gallagher wants Changxin on a list that already encompasses many of China’s largest technology companies, including networking leader Huawei Technologies Co. and its largest storage firm Yangtze Memory Technologies Co. The Entities List blocks the shipment of everything from American software to circuitry without licenses, effectively preventing access to the building blocks of much of modern technology.
The tensions over technology have been brewing since the US imposed sweeping export restrictions on semiconductor equipment and knowhow to China, aimed at stifling its chip sector development, and set off dueling accusations of “economic coercion.”
John Kirby, spokesman for the US National Security Council, said Wednesday that China’s ban on Boise, Idaho-based Micron was intended to undermine the Group of Seven consensus on countering perceived hostile policies by Beijing, but won’t derail White House efforts to restore high-level talks, including between leaders Joe Biden and Xi Jinping.
Gallagher’s Republican colleague Michael McCaul, chairman of the House Foreign Affairs Committee, also criticized Beijing’s move on Micron and called for a response.
“The Biden administration and our allies and partners must make every act of coercion more costly to the CCP,” he said, referring to the Chinese Communist Party. “I urge the administration to use the many authorities Congress has given it to hold the CCP accountable.”
Read more: Xi’s Micron Ban Shows His Limited Options to Hit Back at US
Washington should lean on allies such as South Korea to try and prevent Micron’s peers from stepping in to fill the void in China after the Micron action, argued Gallagher, who chairs the House Select Committee on the Chinese Communist Party. Samsung Electronics Co. and SK Hynix Inc. dominate the world’s supply of memory chips, which power most electronics as well as servers and smartphones.
“This is the latest example of PRC economic coercion, designed to intimidate the U.S. government from implementing export controls and harass the U.S. companies that abide by them,” Gallagher, who’s known for his hawkish stance on China, wrote in a statement.
“The Commerce Department should also ensure no U.S.-export licenses granted to foreign semiconductor memory firms operating in the PRC are used to backfill Micron, and our South Korean allies, who have experienced exactly this kind of CCP economic coercion firsthand in recent years, should likewise act to prevent backfilling.”
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China’s foreign ministry spokeswoman Mao Ning on Wednesday defended the government’s Micron decision.
“The cybersecurity review on Micron’s products sold in China is carried out according to China’s laws and the decision was made based on facts,” she told reporters at a regular press briefing in Beijing.
The US “without any evidence” has listed scores of Chinese companies and individuals “into all kinds of lists and imposed all kinds of restrictions,” she added. “That is what economic coercion is.”
Changxin Memory is one of a handful of major Chinese firms that embody Beijing’s ambitions to match the US technologically, particularly in the semiconductors that drive most advances from AI to self-driving cars. It plans to file for a domestic initial public offering this year that could value the Chinese chipmaker at more than $14.5 billion, a milestone debut that could help galvanize the country’s technology aspirations.
Changxin is already one of the largest Chinese makers of DRAM storage chips, an industry that could serve as a launchpad for more advanced semiconductor development down the road.
–With assistance from Lucille Liu, Ramsey Al-Rikabi and Jennifer Jacobs.
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