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China invests $1.9 billion in YMTC after US restrictions over security concerns: report


China is pouring $1.9 billion into the largest maker of memory chips, according to media reports, as US restrictions on semiconductor exports threaten Beijing’s technology ambitions. Semiconductor manufacturer Yangtze Memory Technologies (YMTC) is set to receive 12.9 billion yuan from the state-owned National Integrated Circuit Industry Investment Fund, Bloomberg reported Thursday, citing government data.

The move comes after the US Department of Commerce in December added YMTC to its so-called “entity list,” barring the company along with dozens of other Chinese companies from buying US chip technology.

Washington has in recent months tightened restrictions on Chinese chipmakers, citing concerns about national security and the ability to use the technology by China’s defense sector.

Under US rules released last week, chipmakers that benefit from a $39 billion government fund must agree not to expand capacity in “relevant countries,” including China, for a decade.

To stop relying on foreign imports for its chips, Beijing has spent billions of dollars building its own semiconductor industry over the past decade.

And in December, it filed a dispute with the World Trade Organization over US chip export restrictions, accusing Washington of protectionism and violating international trade rules.

The investment from the National Fund was part of a capital injection that also included two companies backed by the government of Hubei province, where YMTC is headquartered, Chinese state-controlled business news outlet Jiemian said on Thursday.

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Joanna Swanson

Joanna Swanson is Europe correspondent at the Thomson Reuters Foundation based in Brussels covering politics, culture, business, climate change, society, economies and inclusive tech. With specific focus in breaking news, she has covered some of the world's most significant stories.