Latest US strike on China’s chips hits semiconductor toolmakers

The package also includes fresh export restrictions on chipmaking gear made in countries like Singapore and Malaysia, as well as new restrictions on high-end applications like AI training and high-end shipments of high-bandwidth memory&nbsp, chips, and fresh restrictions on 24 more chipmaking tools and three software tools. Commerce Secretary GinaContinue Reading

Malaysia deepens economic ties with a Russia shunned over Ukraine invasion

However, industry players said some companies may not want to get into business with Russia out of fear they would face trade obstacles given the ongoing sanctions.

For instance, the United States’ latest sanctions sought to further curtail Russia’s use of the international financial system.

Standardising currency used in business with Russia may therefore emerge as a challenge, noted chairman of the Small and Medium Enterprises Association of Malaysia William Ng.

Also, while Russia may have developed its own state-of-the-art software and information technology applications, they would be a hard-sell in Southeast Asia, he added. 

“We have been reliant on the American (and) European vendors for many years. To now shift the reliance to Russia as an option will take a bit of learning,” he said. 

“At the end of the day, we know what is the elephant in the room: That is the issue of Ukraine. Until and unless Russia solves it – and only Russia can solve this issue – everybody else will be at risk (of sanctions),” he added.

RELATIONS BETWEEN ASEAN AND RUSSIA

Still, Malaysia, which will take on the leadership of ASEAN next year, is eager to engage with Russia and BRICS member countries to diversify from its traditional markets, while maintaining ASEAN centrality amid intense superpower rivalries.

Already, ASEAN has benefitted from its trade ties with Russia.

In 2023, Russia’s trade turnover with ASEAN grew by 15 per cent from the previous year. 

The BRICS grouping, which was formed to act as a counterweight to the West and originally comprised Brazil, Russia, India, China and South Africa, added 13 partner countries in October, including ASEAN nations Malaysia, Vietnam, Indonesia and Thailand. 

ASEAN, with a combined GDP of almost US$4 trillion, is the fifth-largest economy in the world. 

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Jailed, corrupt former commerce minister released on parole

Boonsong Teriyapirom arrives at the Supreme Court's Criminal Division for People  Holding Political Positions in Bangkok on Aug 25, 2017, when he was sentenced to prison for corruption. (File photo)
Boonsong Teriyapirom arrives at the Supreme Court’s Criminal Division for People Holding Political Positions in Bangkok on Aug 25, 2017, when he was sentenced to prison for corruption. (File photo)

The Department of Corrections on Monday released on parole former commerce minister Boonsong Teriyapirom, who was earlier sentenced to 48 years in prison for corruption in  government rice sales, according to an informed source.

Boonsong was released from the Medical Correctional Institution and returned to his home province of Chiang Mai. He will be on parole probation for another three years and five months, during which time he will wear an electronic tag.

Boonsong, 64, left the Medical Correctional Institution in Bangkok at 10am on Monday. He would leave for Chiang Mai on Tuesday and report to probation authorities in Chiang Mai on Wednesday, the source said.

In 2017, the Supreme Court’s Criminal Division for People Holding Political Positions first sentenced Boonsong to 42 years in jail for bogus government-to-government (G2G) rice deals. His sentence was extended to 48 years in 2019 after his appeal failed. Subsequent royal clemency reduced his sentence to ten years and eight months, with his release scheduled for April 21, 2028.

In its Aug 25, 2017 ruling, the court found that the G2G contracts to export pledged rice to China were fabricated and in fact involved sales of the pledged rice to private companies in Thailand, which in turn sold the grain to a third party.

The rice was from government stocks under the rice-pledging scheme of the Yingluck Shinawatra administration, when Boonsong was commerce minister.

On the same day, Aug 25, 2017, that Boonsong was jailed, Yingluck, who had been forced to stand down as prime minister, did not show up at the court as ordered. She had fled the country.

On Sept 27, 2017, the court sentenced Yingluck in absentia to five years in prison for failing to stop corruption in her government’s rice-pledging programme.

The rice scheme was a campaign policy that helped the Pheu Thai Party win the general election in 2011, when Yingluck became prime minister.

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Thaioil has backup plan to end CFP project delays

It can call on parent companies to end contractor row, or start afresh

CEO of the Year - Mr Bandhit - Thai Oil
CEO of the Year – Mr Bandhit – Thai Oil

Thaioil Plc is prepared to exercise its rights under a parent guarantee agreement with the main contractors of the US$5.37 billion Clean Fuel Project (CFP) to resolve persistent project delays.

This step will be taken if negotiations with the main contractor consortium, known as UJV, fail to produce a resolution, a source close to the project said.

The CFP, a landmark project aimed at elevating Thaioil to the ranks of the world’s top-tier refineries, has faced delays partly due to disputes between UJV — the consortium of Samsung Engineering (Thailand) Co, Petrofac South East Asia Pte, and Saipem Singapore Pte Ltd — and its subcontractors.

These disputes have triggered prolonged labour protests from subcontractor workers demanding unpaid wages. Subcontractors allege UJV has not met its payment obligations, leaving them unable to pay their workers.

The source said that if negotiations remain inconclusive, Thaioil may invoke its rights under agreements signed with the parent companies of UJV’s three contractors — Samsung Engineering (South Korea), Petrofac (UK), and Saipem (Italy). These agreements ensure accountability if UJV fails to meet its contractual obligations.

Should parent companies fail to address the issues after the parent guarantee is invoked, the matter will proceed to arbitration in Singapore. In parallel, Thaioil has prepared contingency plans, including the possibility of engaging a new main contractor to complete the project.

“Thaioil has consistently supported the main contractor, including extending project timelines and increasing the budget to mitigate Covid-19 impacts. However, the current situation is like the main contractor is using the CFP project as ‘a hostage’ to gain leverage over subcontractor payment issues, which they themselves created,” the source added.

Bandhit Thamprajamchit, chief executive officer and president of Thaioil, confirmed the company has prepared options to address the challenges but declined to provide further details.

“While the CFP’s delay means the project will not commence operations as scheduled in 2024, this is not expected to significantly affect Thaioil’s overall business. The industry outlook for next year remains uncertain, with challenges stemming from China’s sluggish economic recovery and escalating trade conflicts,” he said.

Mr Bandhit said Thaioil has complied with all obligations. The company has already paid UJV in full, and the responsibility for unpaid wages lies with the contractors. “Nonetheless, Thaioil is not ignoring the issue. The company is committed to resolving it swiftly to ensure fair treatment for stakeholders of the project, including workers,” he added.

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Thaioil has backup plan to end Clean Fuel Project delays

It can call on parent companies to end contractor row, or start afresh

Bandhit Thamprajamchit, CEO and president of Thai Oil
Bandhit Thamprajamchit, CEO and president of Thai Oil

Thaioil Plc is prepared to exercise its rights under a parent guarantee agreement with the main contractors of the US$5.37 billion Clean Fuel Project (CFP) to resolve persistent project delays.

This step will be taken if negotiations with the main contractor consortium, known as UJV, fail to produce a resolution, a source close to the project said.

The CFP, a landmark project aimed at elevating Thaioil to the ranks of the world’s top-tier refineries, has faced delays partly due to disputes between UJV — the consortium of Samsung Engineering (Thailand) Co, Petrofac South East Asia Pte, and Saipem Singapore Pte Ltd — and its subcontractors.

These disputes have triggered prolonged labour protests from subcontractor workers demanding unpaid wages. Subcontractors allege UJV has not met its payment obligations, leaving them unable to pay their workers.

The source said that if negotiations remain inconclusive, Thaioil may invoke its rights under agreements signed with the parent companies of UJV’s three contractors — Samsung Engineering (South Korea), Petrofac (UK), and Saipem (Italy). These agreements ensure accountability if UJV fails to meet its contractual obligations.

“Thaioil has consistently supported the main contractor, including extending project timelines and increasing the budget to mitigate Covid-19 impacts. However, the current situation is like the main contractor is using the CFP project as ‘a hostage’ to gain leverage over subcontractor payment issues, which they themselves created,” the source added.

Bandhit Thamprajamchit, chief executive officer and president of Thaioil, confirmed the company has prepared options to address the challenges but declined to provide further details.

“While the CFP’s delay means the project will not commence operations as scheduled in 2024, this is not expected to significantly affect Thaioil’s overall business. The industry outlook for next year remains uncertain, with challenges stemming from China’s sluggish economic recovery and escalating trade conflicts,” he said.

Mr Bandhit said Thaioil has complied with all obligations. The company has already paid UJV in full, and the responsibility for unpaid wages lies with the contractors. “Nonetheless, Thaioil is not ignoring the issue. The company is committed to resolving it swiftly to ensure fair treatment for stakeholders of the project, including workers,” he added.

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‘Italian’ purees likely to contain Chinese forced-labour tomatoes

Getty Images Hands picking a bright red tomato off a vineGetty Images

“Italian” tomato purees sold by several UK supermarkets appear to contain tomatoes grown and picked in China using forced labour, the BBC has found.

Some have “Italian” in their name such as Tesco’s “Italian Tomato Purée”. Others have “Italian” in their description, such as Asda’s double concentrate which says it contains “Puréed Italian grown tomatoes” – and Waitrose’s “Essential Tomato Purée”, describing itself as “Italian tomato puree”.

A total of 17 products, most of them own-brands sold in UK and German retailers, are likely to contain Chinese tomatoes – testing commissioned by the BBC World Service shows.

Most Chinese tomatoes come from Xinjiang province, where their production is linked to forced labour by Uyghur and other largely Muslim minorities. The UN accuses the Chinese state – which views these minorities as a security risk – of torture and abuse. China denies it forces people to work in the tomato industry and says workers’ rights are protected by law. It says the UN report is based on “disinformation and lies”.

All the supermarkets whose products we tested dispute our findings.

Alamy Aerial photo taken on 5 Aug 2020 shows trucks carrying tomatoes waiting in line for sale outside a tomato processing plant in Bohu County, northwest China s Xinjiang Uygur Autonomous Region. The red of the tomatoes contrasts with the brightly coloured blue and turquoise cabs of the trucks. Alamy

China grows about a third of the world’s tomatoes. The north-western province of Xinjiang has the perfect climate for growing the fruit.

It is also where China began a programme of mass detentions in 2017. Human rights groups allege more than a million Uyghurs have been detained in hundreds of facilities, which China has termed “re-education camps”.

The BBC has spoken to 14 people who say they endured or witnessed forced labour in Xinjiang’s tomato fields over the past 16 years. “[The prison authorities] told us the tomatoes would be exported overseas,” Ahmed (not his real name) said, adding that if the workers did not meet the quotas – as much as 650kg a day – they would be shocked with electric prods.

Mamutjan, a Uyghur teacher who was imprisoned in 2015 for an irregularity in his travel documentation, says he was beaten for failing to meet the high tomato quotas expected of him.

“In a dark prison cell, there were chains hanging from the ceiling. They hung me up there and said ‘Why can’t you finish the job?’ They beat my buttocks really hard, hit me in the ribs. I still have marks.”

Mamutjan, who has dark hair and eyes, looks into the middle distance with tears in his eyes.

It is hard to verify these accounts, but they are consistent, and echo evidence in a 2022 UN report which reported torture and forced labour in detention centres in Xinjiang.

By piecing together shipping data from around the world, the BBC discovered how most Xinjiang tomatoes are transported into Europe – by train through Kazakhstan, Azerbaijan and into Georgia, from where they are shipped onwards to Italy.

Map showing the route most Xinjiang tomatoes take to Italy - beginning in Urumqi and ending in Salerno

One company name repeatedly appeared as a recipient in the data. This was Antonio Petti, part of a group of major tomato-processing firms in Italy. It received more than 36 million kg of tomato paste from the company Xinjiang Guannong and its subsidiaries between 2020 and 2023, the data showed.

The Petti group produces tomato goods under its own name, but also supplies others to supermarkets across Europe who sell them as their own branded products.

Our investigation tested 64 different tomato purees sold in the UK, Germany and the US – comparing them in a lab to samples from China and Italy. They included top Italian brands and supermarket own-brands, and many were produced by Petti.

We asked Source Certain, a world-renowned origin verification firm based in Australia, to investigate whether the origin claims on the purees’ labels were accurate. The company began by building what its CEO Cameron Scadding calls a “fingerprint” which is unique to a country of origin – analysing the trace elements which the tomatoes absorb from local water and rocks.

“The first objective for us was to establish what the underlying trace element profile would look like for China, and [what] a likely profile would look like for Italy. We found they were very distinct,” he said.

Source Certain then compared those country profiles with the 64 tomato purees we wanted to test – the majority of which claimed to contain Italian tomatoes or gave the impression they did – and a few which did not make any origin claim.

The lab results suggested many of these products did indeed contain Italian tomatoes – including all those sold in the US, top Italian brands including Mutti and Napolina, and some German and UK supermarket own-brands, including those sold by Sainsbury’s and Marks & Spencer.

But 17 appeared to contain Chinese tomatoes, 10 of which are made by Petti – the Italian company we found listed repeatedly in international shipping records.

Of those 10 made by Petti, these were for sale in UK supermarkets at the time of testing from April-August 2024:

Graphic showing purees sold by: Asda (Asda Organic Tomato Purée” & Tomato Purée Double Concentrate), Morrisons (Morrisons Tomato Puree),  
Tesco (The Grower’s Harvest” & Italian Tomato Purée) and Waitrose (Essential Waitrose Tomato Purée)

These were for sale in German supermarkets, during our testing period:

Graphic showing purees sold by: Edeka (Tomatenmark), Lidl (Baresa Tomatenmark), Penny (Bio Tomatenmark), and Rewe (Bio Tomatenmark)

In response, all the supermarkets said they took these allegations very seriously and have carried out internal investigations which found no evidence of Chinese tomatoes. Many have also disputed the testing methodology used by our experts. Tesco suspended supply and Rewe immediately withdrew the products. Waitrose, Morrisons, Edeka and Rewe said they had run their own tests, and that the results contradicted ours and did not show the presence of Chinese tomatoes in the products.

But one major retailer has admitted to using Chinese tomatoes. Lidl told us they were in another version of its Baresa Tomatenmark – made by the Italian supplier Giaguaro – sold in Germany last year “for a short time” because of supply problems and that they are investigating this. Giaguaro said all its suppliers respected workers’ rights and it is currently not using Chinese tomatoes in Lidl products. The BBC understands the tomatoes were supplied by the Xinjiang company Cofco Tunhe, which the US sanctioned in December last year for forced labour.

In 2021, one of the Petti group’s factories was raided by the Italian military police on suspicion of fraud – it was reported by the Italian press that Chinese and other foreign tomatoes were passed off as Italian.

But a year after the raid, the case was settled out of court. Petti denied the allegations about Chinese tomatoes and the issue was dropped.

As part of our investigation into Petti, a BBC undercover reporter posed as a businessman wanting to place a large order with the firm. Invited to tour a company factory in Tuscany by Pasquale Petti, the General Manager of Italian Food, part of the Petti group, our reporter asked him if Petti used Chinese tomatoes.

“Yes… In Europe no-one wants Chinese tomatoes. But if for you it’s OK, we will find a way to produce the best price possible, even using Chinese tomatoes,” he said.

A graphic showing: On the left - what Petti told us was its last invoice from Xinjiang Guannong dated October 2020, and on the right - a label on a barrel spotted by our undercover reporter sent from XG to Petti dated August 2023

The reporter’s undercover camera also captured a crucial detail – a dozen blue barrels of tomato paste lined up inside the factory. A label visible on one of them read: “Xinjiang Guannong Tomato Products Co Ltd, prod date 2023-08-20.”

In its response to our investigation, the Petti group told us it had not bought from Xinjiang Guannong since that company was sanctioned by the US for using forced labour in 2020, but did say that it had regularly purchased tomato paste from a Chinese company called Bazhou Red Fruit.

This firm “did not engage in forced labour”, Petti told us. However our investigation has found that Bazhou Red Fruit shares a phone number with Xinjiang Guannong, and other evidence, including shipping data analysis, suggests that Bazhou is its shell company.

Petti added that: “In future we will not import tomato products from China and will enhance our monitoring of suppliers to ensure compliance with human and workers’ rights.”

While the US has introduced strict legislation to ban all Xinjiang exports, Europe and the UK take a softer approach, allowing companies simply to self-regulate to ensure forced labour is not used in supply chains.

This is now set to change in the EU, which has committed to stronger laws, says Chloe Cranston, from the NGO Anti-Slavery International. But she warns this will make it even more likely that the UK will become “a dumping ground” for forced labour products.

“The UK Modern Slavery Act, sadly, is utterly not fit for purpose,” she says.

A spokesperson for the UK Department for Business and Trade told us: “We are clear that no company in the UK should have forced labour in its supply chain… We keep our approach to how the UK can best tackle forced labour and environmental harms in supply chains under continual review and work internationally to enhance global labour standards.”

Dario Dongo, journalist and food lawyer, says the findings expose a wider problem – “the true cost of food”.

“So when we see [a] low price we have to question ourselves. What is behind that? What is the true cost of this product? Who is paying for that?”

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Energy key to push for digital hub plan

Big resource questions ahead in AI era, says Bangchak’s CEO

Chaiwat Kovavisarach, Group Chief Executive Officer and President of Bangchak Corporation Plc, delivers a keynote presentation titled "AI, Energy, and the Environment" at the 14th Greenovative Forum to mark Bangchak's 40th anniversary at True Digital Park West in Bangkok on Nov 29. Bangchak Corporation
Chaiwat Kovavisarach, Group Chief Executive Officer and President of Bangchak Corporation Plc, delivers a keynote presentation titled “AI, Energy, and the Environment” at the 14th Greenovative Forum to mark Bangchak’s 40th anniversary at True Digital Park West in Bangkok on Nov 29. Bangchak Corporation

The state’s ambitious goal to make Thailand a digital economic hub in Southeast Asia, driven by the growth of domestic data centre and cloud service businesses, may be achieved at the cost of huge resources.

These facilities are crucial for artificial intelligence (AI), which is playing a bigger role in a variety of jobs from optimising production plans for factories to driving sales for retail businesses.

The growth of AI leads to the need for more data centre and online infrastructure, which increases demand for electricity, said Chaiwat Kovavisarach, group chief executive officer and president of energy conglomerate Bangchak Corporation Plc. He recently introduced participants in the Greenovative Forum to a key aspect of AI: the need for a substantial volume of electricity for the smooth working of data centres and cloud platforms.

How much power these facilities need, where additional electricity will be produced and whether networks of computers can consume less power are key questions that must be addressed for the AI era. Mr Chaiwat offered some solutions as Thailand promotes investment in data centre and cloud service businesses. US companies — Alphabet, parent firm of Google, and Equinix — have announced investment plans here, among others.

Foreign and Thai companies in data centre and cloud service businesses have submitted 47 proposals worth 173 billion baht to the Board of Investment seeking incentive packages. As investment in these businesses gains momentum, the energy issue will only grow more important.

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China sharpens trade war tools ahead of Trump’s arrival – Asia Times

An export control list issued by the Chinese government to restrict the export of about 700 dual-use items took effect on December 1 and will cover more items to serve China’s future trade and national security needs. 

The list was implemented to fulfill the basic requirements of the current Export Control Law and the newly released Regulations on Civil-Military Dual-Use Items to restrict the export of items including nuclear, biological and chemical products and missiles, according to the Chinese Ministry of Commerce (MoC).

In addition, a system of export control classification numbers (ECCN), similar to that of the United States, was also implemented to cover 10 broad categories and five product groups.

The MoC said the new export control list will help guide all parties to comprehensively and accurately implement China’s dual-use items export control laws and policies, improve the efficiency of related governance, better safeguard national security and interests, and fulfill international obligations such as non-proliferation. It said it would expand the list if needed.

The new list and the ECCN system were launched after the State Council unveiled the Regulations on Civil-Military Dual-Use Items on October 19. The new regulations were approved in a meeting of the State Council standing committee on September 18 after G7 countries raised concerns in April about Chinese firms’ shipments of weapon components to Russia. 

It remains unclear whether the new export control list will stop the export of dual-use items from China to Russia. Some Chinese commentators said the list will at least prevent the US from obtaining China’s critical metals, rare earths and key electronic parts. 

“The launch of the export control list is a precise attack to the heart of the US military industry,” a Jiangsu-based military columnist wrote in an article published on November 28. “This is not an ordinary ‘embargo’ but an all-round blockade to completely cut off the Chinese supply chain that the US relies on.”

He wrote the list covers a wide range of products, including computers, electronic devices, chemicals, sensors, lasers and aviation navigation systems. If China uses the list to fight a technology war, the US won’t be able to find alternative products elsewhere, the writer said.

“A number of US defense contractors have been sanctioned by China due to their arms sales to Taiwan,” he wrote. “China has a decisive position in the supply chain of key materials such as rare earths, and the US cannot circumvent it.”

The writer also links the matter to a smuggling case in which a Chinese person surnamed Du was arrested for carrying a bottle of gallium powders when departing the country earlier this year. He says this case is a warning to those who want to make money by illegally exporting China’s key raw materials.

Export control loopholes

In August 2023, China imposed export restrictions on gallium and germanium. Gallium is used in compound semiconductors, which are often used to improve transmission speed and efficiency in radars. Germanium is used in night-vision goggles and the solar cells used to power many satellites. 

Last December, China imposed export controls on graphite, a key raw material for making electric vehicle batteries. In September this year, the country started restricting the export of antimony, which can be used in military equipment such as infrared missiles, nuclear weapons and night-vision goggles, and as a hardening agent for bullets and tanks.

US Customs data shows that China’s shares of total US imports of these commodities haven’t moved much since China imposed export controls on gallium, germanium and graphite in 2023, the Peterson Institute for International Economics (PIIE), a Washington-based think tank, said in an article on October 31. 

PIIE said China requires exporters to file paperwork that includes export agreements, descriptions and certifications of end consumers and intended end use and information on the importing company but all these requirements will only increase compliance work and not actually reduce exports. 

Besides, it said China may not really want to starve US supply chains of critical minerals as this will push the US to source raw materials elsewhere. 

Fentanyl precursors 

While Beijing wants to use its critical minerals as a bargaining chip in potential trade talks, US President-elect Donald Trump wants China to stop shipping fentanyl precursors to Mexico and the US.

On November 25, Trump said he would sign an executive order imposing a 25% tariff on all goods coming from Mexico and Canada to force them to crack down on illegal immigration and drug smuggling into the US.

He said he would charge an additional 10% on products imported from China, above any additional tariffs, until Beijing cracked down on fentanyl smuggling. 

“The idea of China knowingly allowing fentanyl precursors to flow into the US runs completely counter to facts and reality,” said a spokesperson for the Chinese embassy in Washington.  

In August 2024, China added several fentanyl precursors, including 4-AP, 1-bloc-4_AP and norfentanyl, to its list of controlled precursor chemicals and started requiring exporters to obtain a license. 

In October, the US Justice Department announced charges, including attempted distribution of synthetic opioids and fentanyl precursors, against eight China-based chemical companies and eight employees. 

“As Trump will probably use the International Emergency Economic Powers Act (IEEPA) to impose a 10% tariff on Chinese goods, he doesn’t need to go through any lengthy Section 301 investigations or seek approval from the Congress,” a Beijing-based financial columnist says. “This will make the United States’ tariff policy more arbitrary and unpredictable in the Trump 2.0 era.”

He says people should not underestimate the negative impact of this 10% tariff as it could be the beginning of a bigger trade war. 

Read: China calculates impact of losing most favored nation status

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Gautam Adani breaks silence on US allegations to say his group is committed to compliance

NEW DELHI: Adani Group founder Gautam Adani responded for the first time on Saturday (Nov 30) to allegations by US authorities that he was part of a US$265 million bribery scheme, saying that his ports-to-power conglomerate was committed to world class regulatory compliance. The indictment is the second major crisis to hit Adani in just twoContinue Reading

Beijing vows retaliation if Biden curbs Chinese chip firms again – Asia Times

The Chinese government has vowed to “implement necessary measures” after media reports said the United States would add more Chinese semiconductor firms to its Entity List. 

He Yadong, spokesperson of the Chinese Ministry of Commerce, on Thursday threatened to retaliate against Washington after Reuters reported on November 22 that the Biden administration would soon unveil a new round of sanctions to ban shipments of US chips and chip-making equipment to 200 Chinese chip companies.

Media reports said the curbs would be announced before November 28, or Thanksgiving Day, but they have not yet been announced as of this writing. 

Some Chinese commentators said China should further tighten its export rules to prevent US companies from obtaining its metals such as germanium and dysprosium.

“China has dominated the supply of precious metals such as germanium and dysprosium, which are the most important raw materials in the semiconductor industry,” a Jilin-based columnist says in an article. “Our country can completely stop the export of these raw materials, forcing western countries to delay the pace of their technological development.” 

He said this move would provide more time for China to catch up with the US in terms of technological development. 

He said China should consider forming an alliance with Singapore and Japan to jointly stop the US from obtaining key raw materials to make chips.

Meanwhile, some other Chinese commentators are not optimistic that China can unveil any effective countermeasures against the US. 

A Henan-based writer using the pseudonym “Xiaoxi Lishi” published an article with the title “200 Chinese chip firms will be sanctioned. This is game over!”

“The potential sanctioning of 200 Chinese chip companies is undoubtedly a heavy blow to the fast-growing chip industry in China,” the article says. “If chip foundries or packaging firms cannot get their core machine parts, they will have to stop production and suffer from heavy losses.”

The writer says such a disruption will also extend to the upstream and downstream sectors, slowing China’s industry upgrade. He adds that the only thing that China can do is to boost its investment in research and development and form new partnerships with other countries.

200 Chinese firms 

In late July, Reuters reported that the Biden administration planned by the end of August to expand the coverage of its Foreign Direct Product Rule (FDPR), which was first introduced in 1959 to control the trading of US technologies. 

The wire service also said that the US plans to add about 120 Chinese entities, including six chip foundries and their hardware and software suppliers, to its restricted trade list.

But the White House postponed the announcement as American chip and chip-making equipment makers are worried that their revenue in China will be sacrificed. 

Citing an email sent by the US Chamber of Commerce to its members on November 21, Reuters reported that the US Commerce Department planned to publish the new regulation “prior to the Thanksgiving break.” 

The email also said that another set of rules curbing shipments of high-bandwidth memory chips to China was expected to be unveiled in December. 

Analysts said that these would be the Biden administration’s last two rounds of curbs against China’s chip sector before Republican President-elect Donald Trump takes office on January 20, 2025. 

N+3 process

The Reuters report about the potential sanctions against 200 Chinese firms came a few days after Richard Yu, chief executive of Huawei Consumer Business Group, said on November 15 that Huawei would launch its Mate70 flagship smartphone on November 26. 

Chinese media said the premium Mate70 models would use a new 7-nanometer processor known as the Kirin 9100, which is said to be comparable to Qualcomm’s Snapdragon 8 Gen 2 and 8+ Gen 1 for central processing units (CPU) and graphic processing units (GPU), respectively. 

They expected Chinese chipmaker Shanghai Manufacturing International Corp (SMIC) to use its deep ultraviolet (DUV) lithography machines and N+3 process to produce the 9100 processor. 

But on November 26, Huawei’s fans were disappointed by news that the Mate70 Pro would use a chip called Kirin 9020, which is only a fine-tuned version of the existing Kirin 9010 processor made with N+2 process.

The N+3 process can feature 130 million transistors per square millimeter while the N+2 one can only achieve 89 million transistors per square millimeter.

Some Chinese commentators said the failed debut of the 9100 chip showed that Huawei and SMIC were unable to improve their foundry technology without ASML’s extreme-ultraviolet (EUV) lithography machine. 

Read: Huawei’s Mate70 to flex high-end chip self-sufficiency

Read: TSMC’s 7nm chip ban targets China’s AI chipmakers

Read: US to tighten China chip squeeze with old Cold War rule

Read: China: US high-tech investment ban to hurt global supply chain

Read: China boxed out of high-NA lithography race to 1nm chips

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