U.S. gov't removes China's chip toolmaker AMEC from the list of 'military companies'

The U.S. Department of Defense has removed Advanced Micro-Fabrication Equipment (AMEC), an etching and deposition toolmaker from China, from the list of companies operating in America and linked to the Chinese military, reports the South China Morning Post. While the removal makes the chipmaking tool developer's life somewhat easier, it remains in the Department of Commerce's Entity List and under sanctions by the U.S. government, which greatly limits its ability to develop new technology. 

Inclusion in the U.S. Department of Defense's list of Chinese military companies usually has significant implications. It prohibits the DoD from purchasing anything from these entities, restricts their access to U.S. investment markets, limits their access to American technology (including hardware and software that AMEC needs to design its tools), can cause additional sanctions, and can damage their reputation. In the case of AMEC, the inclusion added some additional roadblocks to the company's ability to procure technologies developed in the U.S.  

On the other hand, as AMEC is in the U.S. Department of Commerce's Entity List, its suppliers need an export license to sell it advanced tools and materials, and U.S. citizens and Green card holders need to get permission to work at certain positions at AMEC as well. For example, U.S. citizens Ni Tuqiang and Yang Wei resigned from key technical roles at AMEC in September due to U.S. export restrictions barring citizens from assisting China's semiconductor advancements. AMEC attributed their resignations to personal reasons and confirmed that both will continue with the company in undisclosed roles. Still, it is evident that such inclusions make it harder for AMEC to operate. 

To some degree, for AMEC, the DoC's Entity List could be even worse than the DoD's list of Chinese military companies. Nonetheless, in response to its inclusion into the list in January 2024, AMEC filed a lawsuit in the U.S. District Court for the District of Columbia, asserting that the DoD's decision was unfounded and caused significant and irreparable damage to its reputation and business. Interestingly, this is not the first time AMEC faced such a designation, as it was previously blacklisted in January 2021 and removed just five months later in June 2021.