US restricts Chinese chipmaker from buying American parts

The US has restricted exports to a state-backed Chinese company that makes semiconductors in the latest escalation in Washington's trade fight with Beijing.

On Monday, the US Commerce Department said Fujian Jinhua Integrated Circuit Company would not be able to buy components from American companies without a special license, reports CNN.

The export ban was put in place because Fujian Jinhua "poses a significant risk of becoming involved in activities that are contrary to the national security interests of the US", the Department said.

"When a foreign company engages in activity contrary to our national security interests, we will take strong action to protect our national security," Commerce Secretary Wilbur Ross said.

Ross said the ban would limit the company's ability to "threaten the supply chain for essential components in our military systems".

Monday's action comes after Micron Technology, a memory chip maker in Idaho, accused Fujian Jinhua of stealing its trade secrets in a federal lawsuit last December.

Fujian Jinhua had filed a countersuit against Micron in Chinese court in January.

The move comes as the US and China are locked in a standoff over trade, market access and the transfer of technology secrets, CNN said.

It could add strain to an already tense bilateral relationship. Negotiations have reportedly stalled ahead of a planned meeting between US and Chinese Presidents Donald Trump and Xi Jinping on the sidelines of the upcoming G20 summit in Argentina.

Earlier this year, the Trump administration put an export ban on ZTE, one of China's biggest tech companies.

The Commerce Department said that ZTE lied to American officials about punishing employees who violated US sanctions against North Korea and Iran.

The ban, which became a flashpoint between the two nations, was lifted in July after ZTE paid a $1 billion fine and agreed to oversight measures.

Fujian Jinhua, based in China's Fujian province, was founded in 2016 and has financial backing from the provincial government. It's building a $5.7 billion chip factory in the region.

--IANS

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