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US Lawmaker Calls for Swift Action Against Chinese Chip Giant CXMT in Wake of Micron Incident

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On Tuesday, the chair of the U.S. House of Representatives' committee on China expressed the opinion that the U.S. Commerce Department ought to impose trade restrictions on Changxin Memory Technologies, a Chinese memory chip manufacturer. This recommendation comes in response to Beijing's recent decision to prohibit the sale of certain chips manufactured by Micron Technology Inc, a U.S.-based company.

The limits imposed on Micron by China's cyberspace regulator are the most recent development in a growing trade conflict between the two largest economies in the world. Important politicians and the White House used stern language in response to China's action.

Tuesday, Karine Jean-Pierre, the press secretary for the White House, informed reporters that the Chinese declaration regarding Micron was "not based in fact."

The Commerce Department was "engaged directly" with China, according to the White House, on Micron, a manufacturer of memory chips used in everything from cell phones to data center servers.

The senior Senate Democrat, Senate Majority Leader Chuck Schumer, also stated on Tuesday that he is discussing the matter with other business leaders and allies.

Requests for response from a representative of the Chinese Embassy in Washington were not immediately returned. It was impossible to get in touch with a CXMT representative for comment right away.

A spokeswoman for the Department of Commerce declined to comment.

Representative Mike Gallagher, a prominent legislator known for his select committee on China, has been urging the Biden administration to adopt more assertive positions on China. Among all lawmakers, he stands alone in advocating for retaliatory measures.

In a statement, Gallagher emphasized the need for the United States to firmly communicate to the People's Republic of China (PRC) that any form of economic coercion targeting American companies or its allies would not be tolerated. He proposed that the Commerce Department promptly include ChangXin Memory Technologies (CXMT) in the entity list, while ensuring that no U.S. technology, irrespective of specifications, is supplied to CXMT, YMTC, or any other PRC companies operating in this sector.

Leading DRAM memory chip manufacturer CXMT is the domestic rival most likely to gain if Micron is denied access to China's sizable chip market.

A Chinese chipmaker named Yangtze Memory Technologies Corp. was added to the Entity List in December 2022.

Samsung Electronics Co Ltd and SK Hynix, leading companies in the memory chip industry based in Korea, currently have memory chip factories in China. These non-Chinese firms, along with others, managed to avoid the full impact of the U.S. export controls imposed on chip manufacturing equipment in October. However, they are operating under exemptions from U.S. regulations that are subject to expiration or revocation.

Requests for comment from Samsung and SK Hynix were not immediately fulfilled.

Analysts estimate that CXMT's chips lag behind market leaders Micron, Samsung, and SK Hynix by two to three generations.

Gallagher's appeal follows recent developments wherein U.S. manufacturers of chip manufacturing equipment have reported receiving clarifications from U.S. export control authorities. These clarifications indicate that they will be permitted to ship a greater quantity of tools to China than originally expected.

Investors were warned by Lam Research Corp (LRCX.O), the leading supplier of memory chip manufacturing equipment, that the clarification might result in an increase of hundreds of millions of dollars in Chinese sales.

The Commerce Department clarified how memory chip features are calculated in order to implement export control regulations.

According to Dan Hutcheson, the Vice Chair of TechInsights Inc, a company specializing in research reports on the semiconductor industry, the measurement of chips can vary based on the tools and materials employed in their manufacturing process, as well as their specific design.

Hutcheson noted that even within the community of memory chip manufacturers and buyers, there exists a significant debate surrounding this topic.

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