The US Commerce Department is reviewing the potential addition of more Chinese companies to its “Entity List”.

This list may include ChangXin Memory (CXMT), as well as subsidiaries of Semiconductor Manufacturing International Corporation (SMIC) and Yangtze Memory Technologies Co (YMTC).

The Bureau of Industry and Security has prepared a draft of the proposed list, citing sources familiar with the situation.

This potential action appears to be influenced by ongoing tensions between the US and China.

Companies on the “Entity List” must obtain special licenses to access US goods and tech.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Evolution of the entity list as a geopolitical tool

The U.S. government has progressively expanded its use of the Entity List beyond its original purpose of preventing WMD proliferation.

In 2003, the U.S. first used sanctions against five Chinese firms for exporting materials potentially usable for weapons of mass destruction 1.

By 2019, the strategy expanded to include companies like Hikvision for human rights violations against Uighurs, marking the first application of the Entity List for human rights concerns rather than purely national security 2.

Now with the potential addition of memory chip makers like ChangXin Memory and YMTC subsidiaries, the U.S. is directly targeting China’s semiconductor advancement capabilities in the commercial sector.

This progression demonstrates how export controls have transformed from targeted instruments addressing specific violations to broader tools in U.S.-China strategic competition.

The timing of these moves has become increasingly connected to broader trade negotiations, as evidenced by their complication due to recent U.S.-China economic meetings 3.

2️⃣ The semiconductor paradox: restrictions accelerate self-reliance

U.S. export controls on semiconductor technology have created a paradoxical effect on China’s tech industry.