U.S. chip-equipment leaders reportedly pausing some Chinese operations
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U.S. semiconductor equipment giants such as KLA Corp. (NASDAQ:KLAC) and Lam Research (NASDAQ:LRCX) have reportedly begun pulling staff out of, and ceasing operations at China's biggest memory chipmaker amid the fallout of new American regulations on the export of chip technology.
According to a report from the Wall Street Journal, the U.S. companies are halting their work with Yangtze Memory Technologies, a memory chip company owned by the Beijing government. At issue are new U.S. rules that the Biden Administration put into effect last week that curb certain semiconductor exports that are seen as potentially benefitting the Chinese military.
The U.S. companies have reportedly stopped their support for equipment currently in place at Yangtze Memory's facilities, halted the installation of any new chip-production equipment and also pulled their staff out of Yangtze Memory factories and offices.
It is not yet known if the moves are permanent, or temporary as the companies asses the intricacies of the new U.S. regulations and how those apply to their business operations. The rules establish new license requirements for advanced semiconductors and chip-making equipment that is to be used in Chinese factories. Licenses for facilities that are owned by either American or U.S.-affiliated companies are to be assessed on individual cases, and Chinese-owned facilities will, at least initially, be denied use of the U.S. chip technologies in question.
The moves by the Biden Administration have resulted in several days of uncertainty around many chip companies, and Chinese tech and Internet leaders.