US blacklists five Chinese companies involved in supercomputing

The US Commerce Department has added five companies to its Entity List of organisations that they see as a national security risk. The move comes just days before the US and China are set to resume trade talks.

Chinese companies join Huawei on US blacklist

The US government has already banned American companies from conducting business with Chinese electronics company Huawei, citing the firm as a threat to the national security of the US. Now five more Chinese corporations are barred from buying US computer components unless there is government approval.

Hygon, Chengdu Haiguang Integrated Circuit, Chengdu Haiguang Microelectronics Technology, Sugon, and Wuxi Jiangnan Institute of Computing Technology are the five companies on the US blacklist. The US Commerce Department alleges that the corporations’ actions are ‘contrary to the national security and foreign policy interests of the United States.’

The US Commerce Department said that Hygon revealed that their supercomputers have ‘a variety of military end uses.’ The US is concerned that the companies’ supercomputers could be used to help China’s military.

Will the trade blacklist impact US businesses?

The US trade blacklist could impact US companies in a similar way to chipmakers being affected by the US trade ban.

AMD has a joint venture with Hygon to develop and sell computer hardware. In a statement, AMD’s spokesperson, Drew Prairie, wrote in an email that the corporation will comply with the US Entity List.

‘We are currently evaluating the addition of five new entities to the Entity List by the Bureau of Industry and Security. AMD will comply with the regulations governing that list, just as we have complied with US laws to date,’ noted AMD.

Amanda DeBusk, former US Commerce assistant secretary for export enforcement, said that the new additions to the trade blacklist could help the US put pressure on China before US President, Donald Trump, meets with China’s President, Xi Jinping.

‘Adding more Chinese companies to the US bad guys list may be seen as a way to ramp up the pressure on China,’ said DeBusk.

DeBusk also said that the timing of the addition of the Chinese companies to the blacklist could make China resistant to make progress on trade negotiations with the US.

‘The Chinese may see this as ill-timed bullying. They cannot be seen as making concessions to the United States, so this may have the effect of hurting any chances for trade agreement,’ said DeBusk.