5 Chinese Supercomputer Companies Blacklisted by US Over Security Fears

By | June 22, 2019

The US is blacklisting 5 Chinese organizations engaged with supercomputing with military-related applications, referring to national security as a justification for denying its Asian geopolitical opponent access to critical US technology. The move Friday by the US Commerce Department could confound talks next week between President Donald Trump and his Chinese partner, Xi Jinping, aimed at de-escalating an exchange contest between the world’s two biggest economies.

5 Chinese Supercomputer Companies

The five blacklisted associations put on the so-called Entity List incorporates supercomputer maker Sugon, which is vigorously dependent on US suppliers including chipmakers Intel, Nvidia, and Advanced Micro Devices.

The other four are

  • the Wuxi Jiangnan Institute of Computing Technology
  • three Sugon affiliates.

The Commerce Department called its activities “as opposed to the national security and international strategy interests of the United States.”

Sugon and the Wuxi Jiangnan Institute, which the US said is possessed by a Chinese army research institute, are engaged with China’s push to develop next-generation “exascale” superior figuring to help with military modernization. The technology included supports such military-related assignments as running nuclear simulations, calculating missile directions, and hypersonic algorithms, said Paul Triolo, a technology examiner with the global risk-assessing Eurasia Group.

“This is all about the race to exascale figuring, which China has assigned as a major priority,” he said, including that companies, for example, Sugon have gotten major government backing.

Of specific worry to China hawks in the Trump administration, Triolo included is Sugon’s move to build up a next-generation processor of its own. It authorized one generation of AMD technology as a component of a 2016 joint venture in which a Sugon subsidiary has an ownership stake.

An AMD representative said the company was evaluating the order “to decide subsequent stages identified with our joint ventures.”

In recent years, US and Chinese companies have been substituting as driving makers of the world’s fastest supercomputers. Sugon had 63 of the top 500 in the latest rankings.

The blacklist adequately bars U.S. firms from selling technology to Chinese associations without government approval. A month ago, Commerce a month ago added telecommunications giant Huawei to it, heightening tensions with Beijing.

This is not the first run through the U.S. has put on the Entity List a Chinese organization involved in supercomputer development with military uses. In 2015 it included China’s National University of Defense Technology to the Entity List.

“The US is continuously pressing off access to US technology for significant components of China’s next generation supercomputing,” said Triolo. The long-running campaign isn’t straightforwardly identified to Trump’s current trade war with China.

Trump has imposed 25 percent tariffs on $250 billion (roughly CNY 1718 billion) in Chinese imports and is getting ready to focus on another $300 billion (roughly CNY 2060 billion), extending the import taxes to for all intents and purposes everything China ships to the United States. China has struck back with tariffs on US products.

Converses to resolve the dispute broke off a month ago. But Trump and Xi are planned to meet next week at the Group of 20 summits in Osaka, Japan, to get the negotiations back on track.

“Adding increasingly Chinese companies to the US trouble makers rundown may be seen as an approach to ramp up the pressure on China,” said Amanda DeBusk, a partner at Dechert LLP and the former Commerce Department assistant secretary for export enforcement. “Be that as it may, the Chinese may see this as ill-timed harassing. They cannot be viewed as making concessions to the US, so this may have the impact of hurting any odds for the trade agreement.”

The administration seemed to be sending blended signals ahead of the summit.

In what resembled a generosity motion to Beijing, Vice President Mike Pence delayed a speech planned for Monday at a Washington research organization at which he was expected to criticize China’s communist routine.

Asia expert Tami Overby, senior director at the McLarty Associates consultancy, said that “it appears to be odd” that the Trump administration would defer Pence’s speech and afterward turn around and expand its tech blacklist.