Taiwan’s UMC freezes ties with Chinese firm in response to US sanctions

UMC stops R&D activity with Chinese firm after it was banned from buying U.S. products on national security grounds

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(Image from UMC's webste)

(Image from UMC's webste)

TAIPEI (Taiwan News) – Taiwan’s second-largest contract chipmaker United Microelectronics Corp. (UMC, 聯華電子) has frozen its dealings with Chinese state-owned semiconductor firm Fujian Jinhua Integrated Circuit Co., after the company was sanctioned by the U.S. government on national security grounds.

UMC said in a statement on Oct. 31 that they will halt all research and development activities with the Chinese state-owned company “until we are cleared to resume by the appropriate authorities."

The U.S. Department of Commerce added Fujian Jinhua Integrated Circuit Co. to a list of entities that cannot buy intermediate goods, software, or other technology from U.S. firms, citing national security grounds.

Fujian Jinhua Integrated Circuit Co. "poses a significant risk of becoming involved in activities that are contrary to the national security interests of the United States," the U.S. Department of Commerce said in a statement.

Department of Commerce Secretary Wilbur Ross said the move “will limit its ability to threaten the supply chain for essential components in our military systems," in a separate statement.

Fujian Jinhua Integrated Circuit Co. was founded as part of China’s 13th five-year economic plan and is directly linked to the government’s Made in China 2025 strategic plan which hopes to boost domestic manufacturing in high-technology industries.

UMC and Fujian Jinhua Integrated Circuit Co. are jointly working on production of DRAM technology, with the goal of jointly developing and manufacturing new forms of electronic hardware, according to CNA.

UMC previously said their relationship with Fujian Jinhua Integrated Circuit Co. would remain unchanged by the Department of Commerce ruling.