US executives in limbo at Chinese chip companies after US ban

Nearly all of the CEOs have moved to the chip industry in China after spending years working in Silicon Valley for US chipmakers or semiconductor equipment companies, according to company filings. Their work history reflects the free flow of talent across companies and borders over the years. Some have been drawn to China through initiatives including the country’s “Thousands of Talents” programme, introduced by the Chinese government in 2008 to boost research standards.

Ministry of Commerce this month Enforce export controls On the set of chips and chip-making technology, labeling The largest barrage in the United States Against China’s technology industry so far.

In a rare move that surprised the industry, it also sought to restrict the use of American knowledge by prohibiting American people from supporting advanced chip development in China or production without a license. The department defines U.S. persons as including U.S. citizens, permanent residents, people living in the United States, and U.S. corporations.

Many companies, including Beijing-based

Nora Technology Group a company

002371 1.39%

and ASML Holding NV, a Dutch equipment maker, have suspended their US employees from continuing work that can now be restricted as they seek to clarify the rules, the companies said.

Restricting Chinese companies’ access to American talent deals a direct blow to the heart of China’s attempt to move up the technology chain, said Dane Chamorro, head of global risk and intelligence at business consultancy Control Risks.

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

For many senior Chinese corporate executives, the rule will likely force them to choose between their jobs and US citizenship or permanent resident status, Mr. Chamorro said. The rules require all U.S. persons to apply for a license to continue working on advanced Chinese chip development.

Among the notable top US executives in China is Gerald Yin, founder and chairman of

Advanced precision manufacturing equipment a company ,

Or AMEC, one of the largest chip making equipment suppliers in China. He and six current AMEC senior managers and principal researchers are US citizens, according to the company’s website and its latest annual report.

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

Intel Corporation corp.

And the

Applied materials a company ,

He was the chief technology officer of its Asian unit before leaving to found AMEC.

The Shanghai-based company, which makes engraving machines the key to turning silicon wafers into semiconductors, is seen as a rising national champion in the sector, although it still lags behind global leaders such as

L 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.

Amick and Mr. Yen did not respond to requests for comment.

Among other companies facing impact is a Chinese flash memory chip designer

GigaDevice Semiconductor a company ,

A rising designer of flash chips used in cars and personal computers. The company’s latest annual report said GigaDevice’s vice president, Xu Qingming, and director, Cheng Taiyi, hold US passports.

GigaDevice did not respond to requests for comment.

the king a company

688037 -0.79%

which produces the latest coating equipment and development in China and supplies giant companies including

Taiwan’s semiconductor industry a company

TSM -4.05%

Tell the investors that it is Impact evaluation of the new directives. The company’s latest annual report says the CEO, Chen Shenglong, holds a US green card.

While blocking talent — along with all the other constraints — could significantly slow the progress of the Chinese chip sector, it won’t be enough to kill it, said Ann Hooker, partner at management consultancy Bain & Co. in its group for semiconductors. .

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

Many companies including

Kosovo Liberation Army corp.

lam Research, They have already suspended work of engineers and other lower-ranking employees in China as they seek to clarify rules or licenses to continue their work, the Wall Street Journal previously reported.

A spokesperson for Naura Technology Group, which has a semiconductor equipment manufacturing unit, said it has issued warnings to its US employees within mainland China to suspend work with customers it believes fall under the new restrictions while it waits for more clarity. He said that these employees continued to perform other tasks in the company.

ASML, the Dutch manufacturer of chip equipment, confirmed that it sent an internal email to its US employees on Wednesday, asking US employees – US citizens and foreigners living in America – to refrain from providing services, shipping or support to any of its customers in China until further notice. .

The new rules could also affect employees of Chinese companies with operations at Yangtze Memory Technologies Co. , the leading maker of memory chips in China, which maintains an office in Santa Clara, California, with more than a dozen employees in the United States, according to LinkedIn. They include the Director of Engineering, the Head of American NAND Design, and the Head of Sales in North America.

– Raphael Huang and Rachel Liang contributed to this article.

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