The U.S. Department of Defense has reportedly removed Advanced Microfabrication Equipment Corporation (AMEC), a Chinese manufacturer of etching and deposition tools, from a list of companies operating in the U.S. with ties to the Chinese military. South China Morning Post. While the deletion makes life easier for the developer of wafer-making tools, it remains on the Commerce Department’s Entity List and subject to U.S. government sanctions, which greatly limits its ability to develop new technologies.
Putting Chinese military companies on U.S. Department of Defense lists often has significant ramifications. It prohibits the Department of Defense from purchasing anything from these entities, limits their access to U.S. investment markets, restricts their access to U.S. technology (including the hardware and software AMEC needs to design its tools), could result in additional sanctions, and could harm their reputation. In the case of AMEC, this inclusion adds some additional hurdles to the company’s ability to source U.S.-developed technology
On the other hand, since AMEC is on the U.S. Department of Commerce Entity List, its suppliers need to obtain export licenses to sell advanced tools and materials to it, and U.S. citizens and green card holders need to obtain licenses to hold certain positions at AMEC. . For example, U.S. citizens Ni Tuqiang and Yang Wei Resigned from key technical positions in AMEC in September As U.S. export restrictions prohibit citizens from assisting China’s semiconductor advancements. AMEC attributed their resignations to personal reasons and confirmed that both men will continue to work at the company in undisclosed positions. However, it is clear that this inclusion makes AMEC’s operations more difficult.
To some extent, the U.S. Department of Defense’s Entity List may be worse for AMEC than the U.S. Department of Defense’s list of Chinese military industrial enterprises. Nonetheless, in response to being placed on the list in January 2024, AMEC filed a lawsuit in the U.S. District Court for the District of Columbia, claiming that the Department of Defense’s decision was baseless and caused significant and irreparable damage to its reputation and business. Interestingly, this is not the first time AMEC has faced such a designation as it was previously blacklisted in January 2021 and removed just five months later in June 2021.