American Executives Working In China Affected By U.S. Chip Restrictions

American workers hold key positions throughout China’s domestic chip industry, helping manufacturers develop new chips to catch up with foreign rivals. Now, those workers are in limbo under new U.S. export control rules that prohibit U.S. citizens from supporting China’s advanced chip development, The Wall Street Journal reported.

At least 43 senior executives working with 16 publicly listed Chinese semiconductor companies are American citizens, according to an examination of company filings and official websites by The Wall Street Journal. Many of them hold C-suite titles, from chief executive to vice president and chairman.

On October 9, the Biden Administration imposed new export restrictions on advanced semiconductors and chip-manufacturing equipment in an effort to prevent American technology from advancing China’s military power. Those restrictions require licenses for exports of many advanced technologies to Chinese entities deemed to be working against the U.S. national security interests.

The Wall Street Journal reported that for many senior executives at Chinese companies, the rule will likely force them to decide between their jobs and their U.S. citizenship or permanent resident status. The rules require all U.S. persons to apply for a license to continue working in Chinese advanced chip development.

According to The Wall Street Journal, Beijing-based Naura Technology Group co. and Dutch equipment maker ASML Holding NV, have suspended their American employees from continuing work that could now be restricted while they seek clarity on the rules, the companies have said.

Other companies affected by the restrictions include AMEC, one of China’s largest chip-making equipment vendors, GigaDevice Semiconductor, which makes flash memory chips, and KingSemi Co., which produces the most advanced coating and development equipment in China and supplies giants including Taiwan Semiconductor Manufacturing Co.

Bloomberg reported that Chinese President Xi Jinping pledged his nation will prevail in its fight to develop strategically important tech, underscoring Beijing’s concern over a US campaign to separate it from cutting-edge chip capabilities.

According to Bloomberg, Xi said the world’s No. 2 economy will speed up innovation in areas that are vital to “technology self-reliance,” adding that “China will move faster to launch a number of major national projects that are of strategic, big-picture, and long-term importance”. Bloomberg reported that Xi did not give details on those efforts.

While it is currently unclear exactly what China intends to do in regards to chip-making, it is obvious that the U.S. restrictions are taking their toll on not only China, but also on some American workers who are employed by China’s technology companies. At a glance, it appears that the Biden administration’s restrictions are working as intended.