US-China chip war to hit affiliates of server maker Inspur

In a move that highlights how the ongoing chip war between the US and China is disrupting the global semiconductor supply chain, the US is taking steps to address a loophole in restrictions imposed on Chinese server maker Inspur Group, allowing US companies free continue to continue to supply Inspur’s affiliates, of which there are dozens, according to a Bloomberg report.

Inspur sells servers focused on AI and big data workloads, and does business globally, including in the US, Europe, Middle East, Latin America and Asia Pacific.

Earlier this month, the Biden administration added 37 additional entities, including Inspur, to a trade block list. The block list includes companies to which U.S. semiconductor and chip-making equipment manufacturers are prohibited from selling products without special licenses.

The companies were added to the block list for, among other things, contributing to Russia’s military and/or defense industrial base, supporting the military modernization of the PRC, and facilitating or engaging in human rights violations in Burma and the People’s Republic of China ( PRC). the US Department of Commerce said in a statement.

The Biden administration, including Commerce Department officials, is aware that the chip block list does not specifically concern Inspur affiliates and is working to close the gap, but that could take several weeks, according to the Bloomberg report. Until then, companies including Intel, Nvidia and Cisco, among others, can trade with Inspur without the need for a license.

Inspur is trying to limit the risks of US sanctions

Meanwhile, Inspur Electronic Information Industry, a major part of the Inspur Group, called a board meeting this week to change its home location from its parent company’s address to a place about two kilometers away. according to a report by the Hong Kong-based newspaper South China Morning Post.

The company did not give reasons for the change, but the decision was made just days after the US Department of Commerce added Inspur Group to its trade block list, the report said. However, Inspur Electronic Information Industry is a separate legal entity from its parent company and is not currently on the block list.

The company’s relocation, signaling its move away from the rest of the Inspur group, “partially reflects the limited options available to Chinese tech companies when it comes to mitigating the risks of US sanctions, given their reliance on US components or technologies. the South China Morning Post report added.

US semiconductor trade restrictions seem to be taking their toll on Chinese companies. For example, Chinese chipmaker YMTC, which sought to challenge Samsung Electronics and SK Hynix, has had to lay off workers and stall expansion plans after being added to the block list, the South China Morning Post report said.

US is pressuring allies to impose restrictions on chip exports

As part of a wider trade war with China that the US waged several months ago convinced the Netherlands and Japan to join in banning the transfer of some DUV equipment.

The Dutch export restrictions have been in the works for some time and on Wednesday the Dutch government published more information about its plans.

“These new export controls target advanced chip manufacturing technology, including the most advanced deposition and immersion lithography tools,” said an announcement by Dutch-based ASML, a leading global manufacturer of semiconductor manufacturing equipment.

The The chip war between the US and China puts all kinds of international companies in the crosshairsas supply chain disruption for semiconductors can affect a wide range of products such as automobiles and various types of consumer goods.