Caught Red Handed: Applied Materials Allegedly Illegally Exporting Tech to China

For years China Tech Threat has warned that U.S. export controls have been insufficient to stop the transfer of American technology to the Chinese military. In our August 2023 report, Cash Over County, we explained how American semiconductor equipment manufacturers Applied Materials, KLA, and Lam Research grew their combined revenues from China by 103% between 2018 and 2022—strengthening the Chinese military and intelligence apparatuses in the process.Apparently, the greed infecting at least one of these companies is worse than we thought.Reuters reports that the Justice Department is investigating Applied Materials for allegedly selling hundreds of millions of dollars’ worth of equipment to China in violation of U.S. export controls. The alleged infractions took place in 2021 and 2022,… Read More

Congress’ Narrow Inquiry into U.S. Investment in China is not a Winning Strategy

Writing in The Washington Times this week, Roslyn Layton examined the current inconsistencies in the United States’ regulatory approach towards curbing investment in Chinese military proxies. As we covered recently, President Biden issued an executive order that would require “U.S. firms to notify the federal government if they invest in some lower-end semiconductor production not already covered by export controls.” In Congress, the U.S. House Select Committee on the Chinese Communist Party sent letters to financial firms BlackRock and MSCI this month, notifying their CEO’s that the Committee was investing the companies’ investments into certain Chinese companies. The letter states “Americans are now unwittingly funding PRC companies” that develop technologies for the People’s Liberation Army (PLA).Layton notes that this… Read More

Chinese Majority Owner of Lexmark Blocked By U.S Homeland Security Department

Last week, the Wall Street Journal reported that the U.S. Department of Homeland Security blocked the import of products made by Ninestar, the Chinese owner of Lexmark International. Ninestar and eight China-based subsidiaries are blacklisted because of their “participation in business practices that target members of persecuted groups” including Uyghurs.Lexmark positions itself as an American company (with a headquarters in Kentucky), exercising independence from the Chinese government. However, as CNBC reported in an analogous situation, “Huawei says it would never hand data to China’s government. Experts say it wouldn’t have a choice.” Dr. Miles Yu of the Hudson Institute further explains their obligation in a 2– minute video here.But while the federal government may ban such products, state… Read More

The State of Michigan is Building Momentum Against Banning Contracts with the PRC

In March of 2023, more than 100 residents in rural Michigan revolted against a decision to allow Chinese-owned firms to build a battery plant in the area, wanting to protect their land from the threats of the PRC. The revolt made it clear Michigan residents do not want ties to China within the state. One way Michigan leaders can heed the concerns of residents is by ending contracts with government restricted Chinese technology companies. In our recent report, China Tech Threat revealed  that the state of Michigan spent $3,428 on restricted Chinese technology from Lenovo, that the state does not provide any details on which departments use the technology, (see our Michigan fact sheet here).This dangerous Chinese government-owned technology… Read More

Skirting U.S. Export Controls, China Stockpiles U.S. Semiconductor Toolmaking Equipment

New Financial Reports Reflect Huge Profits from Selling to Chinese Chipmakers with Connections to the Chinese MilitaryThe White House’s June 2021 supply chains report noted that the People’s Republic of China (PRC) relies on the U.S. and a couple of other companies/countries to purchase the tools that allow them to manufacture their own microchips. More specifically, three U.S. companies lead the global toolmaking industry: Lam Research, KLA, and Applied Materials. According to White House calculations, the semiconductor equipment manufacturing industry is dominated by the US (42 percent market share), Japan (31 precent) and the Netherlands (19 percent), concluding that “although there is a Chinese company producing every category of semiconductor manufacturing equipment, Chinese companies “do not have a notable… Read More