American Executives in Limbo at Chinese Chip Companies After U.S. Ban

SINGAPORE—American workers hold key positions in China’s domestic chip industry, helping makers design new chips to catch up with foreign competitors. Now these workers are in limbo under new US export control rules that ban US citizens from supporting China’s advanced chip development.

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At least 43 senior executives working at 16 listed Chinese semiconductor companies are US citizens, according to a Wall Street Journal examination of company records and official websites. Many of them hold C-suite titles, from chief executive to vice president and chairman.

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Almost all of the executives moved to the Chinese chip industry after years of working in Silicon Valley for US chipmakers or semiconductor equipment suppliers, company filings show. Their work stories reflect the free flow of talent across companies and borders over the years. Some have been drawn to China by initiatives, including the country’s “Thousand Talents” program, launched by the Chinese government in 2008 to improve research standards.

US firms are relocating at the fastest pace in history, partly due to the trade war with China and rising tariffs. But that may not mean much gain for American workers. WSJ’s Dion Rabouin explained. Illustration: David Fang

The Commerce Department this month imposed export controls on a range of chips and chip-making technologies, in the US’s biggest salvo yet against China’s tech industry.

In a rare move that caught the industry by surprise, it also sought to limit the use of American know-how by barring US persons from supporting China’s advanced chip development or production without a license. The Department defines US persons as US citizens, permanent residents, persons residing in the US, and American corporations.

Several companies including Beijing-based Naura Technology Group co

002371 1.39%

and Dutch equipment maker ASML Holding NV have suspended their American employees from continuing work that could now be curtailed while they seek clarity on the rules, the companies said.

Limiting Chinese companies’ access to US talent comes as a direct blow to the heart of China’s attempt to move up the tech chain, said Dane Chamorro, a Washington, DC-based head of global risk and intelligence at consultancy Control Risks .

“Technology is nothing without the people who make it work,” he said.

For many senior executives at Chinese companies, the rule will likely force them to choose between their jobs and their US citizenship or permanent residency status, Mr Chamorro said. The rules require all US citizens to apply for a license to continue working in Chinese advanced chip development.

Prominent US executives in China include Gerald Yin, Founder and Chairman of Advanced Micro-Fabrication Equipment inc,

or AMEC, one of the largest Chinese suppliers of chip manufacturing equipment. According to the company’s website and its most recent annual report, he and six current senior managers and core researchers at AMEC are US citizens.

Mr. Yin, whose company is listed on the Shanghai Stock Exchange, has worked for Silicon Valley companies including Intel for nearly 20 years corp

and applied materials inc,

where he was Chief Technology Officer of the Asia unit before leaving to found AMEC.

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The Shanghai-based company, which makes etching machines to convert silicon wafers into semiconductors, is seen as a rising national champion in the sector, although it still lags behind global leaders like Lam Research corp

and applied materials. In its latest annual report, the company said it received more than $50 million in subsidies from the Chinese government in 2021.

AMEC and Mr. Yin did not respond to requests for comment.

Other companies affected include Chinese flash memory chip designer GigaDevice Semiconductor inc,

an aspiring designer of flash chips used in cars and personal computers. GigaDevice vice chairman Shu Qingming and a director Cheng Taiyi hold US passports, according to the company’s latest annual report.

GigaDevice has not responded to requests for comments.

KingSemi co

688037 -0.79%

which manufactures the most advanced plating and development equipment in China and supplies giants such as Taiwan Semiconductor Manufacturing co

TSM -4.05%

, informed investors that it is evaluating the impact of the new guidelines. One executive, Chen Xinglong, holds a US green card, according to the company’s latest annual report.

While withholding talent — along with all the other restrictions — could significantly slow the progress of China’s chip sector, killing it won’t be enough, said Anne Hoecker, a partner at management consultancy Bain & Co. at her semiconductor conglomerate.

“There is one thing that China has been very consistent about – its need to build a domestic source of semiconductors,” she said. “They will continue to invest a lot of money and continue to develop.”

Many companies including KLA corp

and Lam Research have already suspended the work of engineers and other less-senior workers in China while they seek clarity on the rules or licenses to continue their work, the Wall Street Journal previously reported.

Naura Technology Group, which has a semiconductor equipment manufacturing unit, warned its American staff in mainland China to stop working with customers it believes will fall under the new restrictions while it awaits more clarity, said a spokesman. Those employees have continued to perform other duties at the company, he said.

For many American executives at Chinese companies, the Commerce Department rule will likely force them to choose between their job and their US citizenship.


Photo:

I-Hwa Cheng/Bloomberg News

ASML, the Dutch chip equipment maker, confirmed that it sent an internal email to its U.S. employees on Wednesday, urging U.S. employees — both U.S. citizens and resident aliens — to opt out of the maintenance refrain from shipping or providing support to any of its customers in China until further notice.

The new rules could also affect employees of Chinese companies operating in the United States. Yangtze Memory Technologies Co., China’s leading memory chip maker, maintains an office in Santa Clara, California, with more than a dozen employees in the United States, according to LinkedIn. This includes a technical director, the director of US NAND design and the director of North American sales.

write to Liza Lin at [email protected] and Karen Hao at [email protected]

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