US Imposes New Restrictions On Chinese Supercomputer Companies

US Blacklists 5 More Chinese Tech Companies

US Blacklists 5 More Chinese Tech Companies

Chinese high-tech companies should prepare for possible expansion of U.S. government technology restrictions to more emerging sectors and should press ahead with developing core technologies, a leading technology expert said.

The US Commerce Department said on Friday it was adding several Chinese companies and a government-owned institute involved in supercomputing with military applications to its national security "entity list" that bars them from buying US parts and components without government approval.

The US has now made its latest move to push ahead in the country's ongoing tech cold war with China.

The US decision to block the five Chinese supercomputing companies will not have a "decisive impact" as domestic players, according to a report on Tuesday by the Science and Technology Daily, the official newspaper of China's Ministry of Science and Technology.

The other three Chinese firms are companies that have direct ties with Sugon.

The US Commerce Department said it was adding Sugon, the Wuxi Jiangnan Institute of Computing Technology, Higon, Chengdu Haiguang Integrated Circuit and Chengdu Haiguang Microelectronics Technology - along with numerous aliases of the five entities - to the list over concerns about military applications of the supercomputers they are developing. According to the agency, these companies were deemed as threats to the US' national security.

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"China is finding itself with no choice but to create its own alternatives to United States technology", said Paul Haswell, a partner who advises technology companies at global law firm Pinsent Masons. The restrictions are similar in nature to the recently imposed trade restriction on the Chinese telecommunications giant Huawei.

Given the new restrictions on U.S. components, Sugon and Wuxi Jiangnan Institute of Computing Technology will likely have to resort to finding suppliers outside of the United States.

"No matter whether it is aimed at suppressing Chinese technology or its long-term economic development, or put pressure on China in the trade negotiations, the United States will not achieve its aims", it said. The ruling will affect USA companies that supply Sugon, including Advanced Micro Devices, Intel and Nvidia. Sugon uses components from various companies around the world to manufacturer supercomputer systems and advanced scientific equipment.

The US has also been reducing (by half) the number of licenses for US companies to assign Chinese nationals to advanced engineering projects. Both of the companies were specifically mentioned in the Commerce Department's notice.

They are also used for weather prediction, modelling ocean currents, in energy technology and for simulating nuclear explosions. The Trump administration is also considering a requirement that cellular equipment used in the United States' developing 5G network be made nearly entirely outside China.

China continues to dominate the list of the world's fastest supercomputers by the number of computer units, according to a semiannual ranking of the Top 500 published last week.

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