Chinese-American Executives of Chinese Semiconductor Makers Face Challenges amid Restrictions from U.S.

The US’s Bureau of Industry and Security added 31 new Chinese entities to an “Unverified List” on October 7, a move that affects fields like electric vehicles, aerospace and even smartphones, requiring chip makers to obtain permission from the bureau to export certain chips to China for advanced AI computing and supercomputing.

Under the new restrictions, Americans – including U.S. citizens and permanent residents – must obtain a license to work for any Chinese company that develops or produces semiconductors that meet certain standards. Given the large number of Chinese-Americans working in China’s chip industry, the rule could be disruptive to the country’s tech industry.

The Chinese Ministry of Commerce responded on October 10 that the U.S. upgrading of export control measures in semiconductor and other fields is a typical move for technological hegemony.

Chinese-American semiconductor executives include Yin Zhiyao, chairman of China’s leading equipment maker Advanced Micro-Fabrication Equipment Inc. Semiconductor maker Piotech, has at least four executives who also hold U.S. citizenship. The returnee executives have long been seen as vital to China’s goal of improving its chip and tech industries, with many touting their experience working at top U.S. companies such as Intel, Applied Materials and Lam Research.

Chinese-American Executives of Some Chinese Semiconductor Companies

China has been encouraging people with special skills and industry knowledge to return home to teach at top universities or start their own companies. However, the U.S. now sees such plans as a threat. The latest export controls are the first explicit attempt by the U.S. to prevent returnees from helping China develop its own advanced semiconductors for supercomputers, artificial intelligence and other critical applications. Previously, the U.S. only regulated the activities of Americans related to China’s nuclear or chemical weapons programs.

Chinese media outlet IC Views quoted one lawyer’s point of view, saying that the ban means that Chinese-Americans can avoid the latest regulations by giving up their U.S. citizenship or changing the scope of their work. However, it will not be easy for them to renounce their citizenship overnight, multiple chip industry executives said. Many of them have families and assets in the U.S.

One Twitter blogger exposed several chat records, showing that American teams from many major Chinese semiconductor makers will be evacuated, and related projects will become stagnant.

The Biden administration’s new restrictions mean that U.S. companies must obtain licenses to export components that can be used to support “homegrown chip-making equipment” companies such as Naura Technology Group and Advanced Micro-Fabrication Equipment Inc. American equipment makers such as Lam Research must obtain licenses to ship high-end tools to their customers in China.

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The Wall Street Journal reported that, although the Commerce Department isn’t ready to add these 33 Chinese chip makers to its blacklist, known as the entity list, it made clear that if a foreign country doesn’t cooperate in allaying those concerns, the company can be put onto the list. China’s Huawei and largest chip maker Semiconductor Manufacturing International are both on the entity list.

New limits on sales of chip-making equipment are also expected to clamp down on the operations of China’s homegrown chip makers, The New York Times reported, citing people familiar with the matter.