Recently, The American Commerce Department put a ban on five other Chinese companies from buying components which are manufactured in the country. Previously, the American government had put a ban on Chinese mobile producing giant Huawei.
As per the filing five companies which are recently banned are Higon, Sugon, Chengdu Haiguang Integrated Circuit, Wuxi Jiangnan Institute of Computing Technology and Chengdu Haiguang Microelectronics Technology.
One of the spokesperson of the department stated that the government is concerned regarding the involvement of these companies in activities which might cause a threat to the national security and to the foreign policies of America.
After the above statement, shares of American semiconductors fell. Nvidia, Xilinx and Advanced Micro Devices registered a fall of 1.5%, 2.2% and 3%. The present move was taken by the American government before the G20 Summit in which Donald Trump and Xi Jinping were about to discuss the trade differences.
At present, China and the US have imposed huge tariffs on each other’s commercial products and the trade war is still on. Due to this both the countries have to suffer a great deal of economic set back and they are also dealing with unemployment and rise in the prices of goods.
One of the spokesperson of Commerce Department pointed out that Wuxi Jiangnan and Sugon play major role in exascale Computing system of China. The department further said that Sugon has also acknowledged military high performance computers so that it can modernize the Chinese military.
Due to restrictions which the American government has put on Huawei, many chip making companies counting Google had to stop doing any business dealings with the Company. At present, Qualcomm as well as Intel are trying to ease the case of Huawei. Both the companies used to supply chip to Huawei in the US.
Alberto Strayer is World Industry Insights editor-in-chief. He is responsible for all business related editorial products. Alberto years ago, he joined World Industry Insight as a senior staff writer. Alberto spent the initial decade of his career with the publication covering business. Due to his efficiency and eye for detail, Alberto achieved the best performer of the year for consecutive 2 years. Alberto earned a Bachelor’s Degree in magazine production and editing. He loves to travel and explore the world in his free time.