Commerce Department blacklists five Chinese tech groups due to national security concerns

The Commerce Department added five Chinese technology groups to its “entity” list on Friday, effectively blacklisting the organizations from buying components from U.S. companies unless they get a waiver.

The five entities added were high-performance computing group Sugon, the Wuxi Jiangnan Institute of Computing Technology, semiconductor company Higon, Chengdu Haiguang Integrated Circuit and Chengdu Haiguang Microelectronics Technology. 

{mosads}The Commerce Department’s Bureau of Industry and Security wrote in its notice of the additions to the list that “these five entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States.”

The bureau noted that Sugon and the Wuxi Jiangnan Institute of Computing Technology are leaders of China’s development of high-performance computing, with both also involved in modernizing China’s military.

According to The New York Times, Sugon’s inclusion on the list is especially crippling to China due to its computers being used by China’s State Grid, which runs the electric grid, and to run China Mobile, the largest telecommunications group service provider. Sugon relies on computer chips made by Intel and AMD, both U.S. companies.

The decision to add these groups to the entity list comes a month after the Commerce Department took the same step with Chinese telecommunications group Huawei, though it later backtracked and put a 90-day extension on the group being added to the list to allow U.S. companies to prepare.

In response, a spokesperson for China’s Commerce Ministry announced in May that the agency is working to create an “unreliable entity list” of foreign companies and individuals that “seriously damage” Chinese enterprises.