U.S. halts shipments of advanced semiconductor tools to Hua Hong
- The U.S. Commerce Department last week ordered multiple chip-equipment suppliers to halt certain shipments bound for two Hua Hong facilities in China. - Lam Research, Applied Materials and KLA were among companies believed to receive letters; their shares fell 3.1%, 5.8% and 4.7% Tuesday. - The move follows Reuters’ March report that Huali was preparing a 7-nanometer process in Shanghai. (finance.yahoo.com)
The U.S. Commerce Department last week told multiple chip-equipment companies to stop certain shipments to China’s Hua Hong, according to Reuters. (finance.yahoo.com) Reuters reported the letters covered tools and other materials headed to two Hua Hong facilities that U.S. officials believe could make China’s most sophisticated chips. Lam Research, Applied Materials and KLA were among the companies believed to have received them. (finance.yahoo.com) The letters also aimed to block shipments to Huali Microelectronics, a Hua Hong Group contract-chip unit, according to Reuters’ sources. Reuters said Huali was preparing a 7-nanometer process at its Shanghai plant. (finance.yahoo.com) (money.usnews.com) A foundry is a factory that makes chips designed by other companies. The U.S. has spent the past several years trying to keep the most advanced chipmaking tools out of Chinese plants that can produce leading-edge processors. (finance.yahoo.com) (bis.gov) Reuters reported in March that Hua Hong Group had developed manufacturing technology that could be used for artificial-intelligence chips. If Huali reaches 7-nanometer production, it would become the second Chinese chipmaker after Semiconductor Manufacturing International Corp., or SMIC, with that capability. (money.usnews.com) Markets reacted quickly after the Reuters report. Applied Materials fell 5.8%, KLA dropped 4.7%, and Lam Research closed down 3.1% on Tuesday. (finance.yahoo.com) Reuters said the restrictions could cost U.S. suppliers billions of dollars in sales, especially if they were outfitting a new fab or retooling a plant for more advanced production. Reuters also said Hua Hong may still try to replace blocked tools with equipment from non-U.S. or Chinese vendors. (finance.yahoo.com) The halt extends Washington’s export-control campaign from broad rules to company-specific letters. For Hua Hong and Huali, the immediate issue is whether those Shanghai lines can keep moving toward 7-nanometer chips without the blocked tools. (finance.yahoo.com)
