AsianFin -- The United States on Friday imposed penalties on two Chinese companies that supplied U.S. chipmaking equipment to China ’ s leading semiconductor manufacturer, SMIC, adding them to the Commerce Department ’ s Entity List. The latest round of restrictions includes a total of 32 entities, 23 of which are based in China.

GMC Semiconductor Technology ( Wuxi ) Co. and Jicun Semiconductor Technology were specifically added for acquiring equipment for SMIC Northern Integrated Circuit Manufacturing ( Beijing ) Corp. and Semiconductor Manufacturing International ( Beijing ) Corporation. Both SMIC entities were already on the Entity List, meaning that shipments of U.S.-origin equipment to them require export licenses, which in most cases would likely be denied.

Separately, Shanghai Fudan Microelectronics Technology Co., a producer of high-performance computing chips, along with affiliated firms and other entities in China, Singapore, and Taiwan region, were added to the list for obtaining U.S.-origin items in ways that allegedly support China ’ s military modernization, participation in advanced computing, and integrated manufacturing and distribution sectors, as well as direct supply to China ’ s military, government, and security agencies.

The Commerce Department also noted that Shanghai Fudan Microelectronics has provided technology to Russian military end users, prompting additional restrictions on the company.

The newly sanctioned companies have not yet commented publicly on the listing.

In addition to China, the updated Entity List includes entities from India, Iran, Turkey, and the United Arab Emirates, reflecting the U.S. government ’ s broader effort to control the transfer of sensitive technology and equipment globally.

The Chinese companies newly included range across critical sectors such as semiconductors, integrated circuits, biotechnology, aerospace, quantum technology, industrial software, and logistics. Among the most high-profile additions are Shanghai Fudan Microelectronics, the Aerospace Information Research Institute of the Chinese Academy of Sciences, and Sino IC Technology. Of the 23 Chinese entities, 13 are directly linked to the semiconductor and integrated circuit industries.

According to BIS, these organizations have allegedly engaged in activities "contrary to the national security or foreign policy interests of the United States," including supporting China ’ s advanced computing and semiconductor sectors, participating in biotechnology and engineering software development, and potentially facilitating the transshipment of items to sanctioned parties. The listing imposes strict licensing requirements on exports, with BIS emphasizing a "presumption of denial" for most applications. Some entities have been marked with Footnote 4, indicating that items related to supercomputing and AI technologies are subject to additional controls, effectively restricting their access to global supply chains.

Fudan Microelectronics, founded in 1998 and listed both in Hong Kong and on the Shanghai STAR Market, specializes in the design, development, and testing of very large-scale integrated circuits. The company ’ s product portfolio spans security and identification chips, non-volatile memory, FPGA chips, smart meter chips, and integrated circuit testing services. Its products are used in finance, social security, automotive electronics, urban public transportation, smartphones, and other sectors across more than 30 countries.

The Aerospace Information Research Institute, formed in 2018 through the merger of three key Chinese Academy of Sciences institutes, now employs over 4,500 staff, including six academicians. The institute operates 31 national or academy-level key laboratories and focuses on national strategic priorities in aerospace information, establishing an integrated, large-scale research infrastructure.

The Entity List additions are part of a broader U.S. strategy that has intensified since 2018 to restrict China ’ s access to advanced AI, semiconductor technology, and related equipment. Export controls first emerged during the Trump administration, focusing on dual-use items and the implementation of entity-based controls. The Biden administration further expanded the scope, adding restrictions on advanced chips, semiconductor manufacturing equipment, and AI technologies, often in coordination with Japan and the Netherlands.

Over the past seven years, BIS has reviewed more than 2,600 license applications involving Chinese entities, with approvals totaling roughly $335 billion. At the same time, 1,293 applications were denied, revoked, or returned without action, representing about $545 billion. The number of Chinese entities on the Entity List has risen sharply, from just five in 2018 to over 1,065 as of March 31, 2025, accounting for nearly a third of all entries.

The repeated restrictions are viewed by many as part of U.S. efforts to maintain technological superiority in AI, advanced computing, and semiconductor industries. The recent listing of Fudan Microelectronics, a key player in China ’ s integrated circuit sector, underscores the focus on high-value, strategically important technology firms.

China has strongly criticized these measures. Foreign Ministry spokesperson Guo Jiakun said that the U.S. is abusing export control tools like the Entity List under the pretext of national security, violating international law, and undermining global supply chains. He emphasized that China opposes such unilateral sanctions and urges the U.S. to stop politicizing and weaponizing trade and technological issues. Guo also warned that China will take all necessary measures to safeguard the legitimate rights and interests of its companies.

This latest round of restrictions comes amid growing competition between the U.S. and China in critical technology sectors, including AI and semiconductors. It is expected to further complicate supply chains for Chinese companies reliant on overseas technology, especially in semiconductor design and manufacturing equipment. Analysts predict that firms like Fudan Microelectronics will face increased challenges in sourcing advanced chips and components, potentially slowing innovation timelines and complicating partnerships with international suppliers.

Industry observers note that while these measures target strategic sectors, they could also have broader global ramifications. Multinational firms that supply high-end semiconductor equipment or software to affected Chinese companies may face heightened compliance requirements, delays, and additional licensing hurdles. This could disrupt global technology markets and slow the rollout of advanced AI and semiconductor products.

In recent years, the U.S. has also implemented a series of related restrictions, including the global AI diffusion rule issued in January 2025, which limits China ’ s access to advanced AI chips and computing power. Combined with historical controls on EUV and DUV lithography equipment, these measures form a comprehensive strategy aimed at maintaining U.S. technological leadership.

The listing of 23 Chinese entities, including Fudan Microelectronics, marks the latest escalation in an ongoing technology rivalry. With significant implications for both domestic innovation in China and the global semiconductor ecosystem, the move underscores the intensifying intersection of technology, national security, and geopolitics.

As tensions mount, affected companies are likely to seek alternative supply chains, increase domestic development of key technologies, and pursue legal and diplomatic avenues to mitigate the impact. At the same time, observers anticipate that U.S.-China technological decoupling will continue to influence international trade, investment flows, and research collaboration across critical technology sectors.