US Lawmakers Urge Ban on Purchases of Chinese Memory Chips From CXMT, YMTC

Lawmakers send letter to commerce secretary

Move targets Apple’s push to adopt CXMT chips

‘Unacceptable risk’ to US security

Call for joint action with South Korea, Japan and EU

US lawmakers are urging the Trump administration to ban purchases in the US of memory chips made by China’s ChangXin Memory Technologies, or CXMT, and Yangtze Memory Technologies Co., or YMTC, as Washington seeks to curb reliance on China for semiconductors used in artificial intelligence infrastructure.

The Financial Times reported on July 16 that Representative John Moolenaar, chairman of the House Select Committee on China, and Representative George Whitesides, a Democrat, sent a letter to Commerce Secretary Howard Lutnick with that request. In the letter, they argued that dependence on Chinese memory chips poses “an unacceptable risk to America’s national security, economic security and supply chain security.” The push followed an FT report that Apple has been lobbying the Trump administration for approval to use CXMT products.

The lawmakers also criticized moves by US technology companies, including Apple, to consider Chinese memory chips as global DRAM prices rise and supplies tighten. “China’s leading memory chip manufacturers are all closely connected to the Chinese military,” Moolenaar said. US companies’ purchases of those chips would directly support the People’s Liberation Army’s development of critical dual-use technologies, he added.

The Pentagon added CXMT this year to its list of Chinese military companies. Being placed on that list does not automatically bar US companies from doing business with the company. The lawmakers urged the administration to create separate rules preventing US companies from buying semiconductors from companies on the Pentagon’s Chinese military company list or the Commerce Department’s export-control list. They also called for CXMT to be added to the export-control list and for tighter sanctions on YMTC, which is already on it.

The letter also called for a coordinated response with allies. The lawmakers said the US should work with South Korea, Japan and the European Union to stop CXMT and YMTC from entering allied supply chains as global memory shortages create an opening. CXMT and YMTC are Chinese memory-chip makers focused on DRAM and NAND flash, respectively. Most of their sales still go to China’s domestic market. Their advanced manufacturing capacity trails global rivals because of US restrictions on exports of semiconductor manufacturing equipment. Still, aggressive investment and capacity expansion could increase their influence on global memory prices and supply chains over time.

CXMT has a 9% share of global DRAM bit shipments, according to market researcher Counterpoint Research. The company is set to raise about $10.1 billion through a listing on Shanghai’s STAR Market this month, which would further expand its scale. YMTC is also preparing an initial public offering. “With CXMT’s recent market-share expansion, Apple’s lobbying, broader global export growth and an imminent move into the high-bandwidth memory market, the conditions are in place for further growth,” Neil Shah, a vice president at Counterpoint Research, said.

Hong Min-seong, Hankyung.com reporter mshong@hankyung.com