Exclusive-US orders chip equipment companies to halt some shipments to Hua Hong, China's second-largest chipmaker

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Karen Freifeld

Tue, April 28, 2026 astatine 11:53 AM CDT 2 min read

By Karen Freifeld

NEW YORK, April 28 (Reuters) - The U.S. Department of Commerce past week ordered galore spot instrumentality companies to halt definite instrumentality shipments to China's second-largest chipmaker ‌Hua Hong, according to 2 radical acquainted with the matter.

The section sent letters to ‌at slightest a fistful of companies informing them of the caller restrictions connected tools and different materials destined for Hua Hong facilities that U.S. officials judge volition marque China's astir blase chips, the radical said. Top U.S. spot instrumentality companies Lam Research, Applied Materials and KLA, each of which has important concern supplying China, were among those believed to person received a letter, the sources added.

Reuters exclusively reported successful March ‌that Hua Hong Group had developed ⁠advanced spot manufacturing technologies that could beryllium utilized to nutrient artificial quality chips, a milestone successful Beijing's efforts to boost tech self-sufficiency. The group's declaration chipmaking ⁠business, Huali Microelectronics, was preparing a 7-nanometer chipmaking process astatine its Shanghai plant, sources said. SMIC, China's largest declaration chipmaker, is the lone home institution that tin presently marque chips with 7-nm technologies, the report said. The letters from the Commerce Department besides purpose to prevent shipments to Huali, sources said.

U.S. ‌AIMS TO PROTECT LEAD ON AI CHIPS

In caller years, the Commerce Department has restricted U.S. companies from shipping instrumentality to Chinese factories producing precocious chips arsenic portion of an effort to safeguard the U.S.' technological pb successful making AI and different precocious chips connected nationalist information grounds. The caller letters transportation this argumentation forward, but could summation hostility with China up of President Donald Trump's ‌scheduled gathering with Chinese President Xi Jinping successful Beijing successful May.

U.S. chip instrumentality companies and different suppliers could suffer billions of dollars successful sales, 1 of the radical said, particularly if they were supplying a chipmaking works that is nether construction, ‌or 1 that is retooling to statesman making much precocious chips. The restrictions could dilatory China's home chipmaking drive, though Hua Hong whitethorn beryllium capable to regenerate the tools with ones from overseas oregon Chinese companies.

A Commerce Department spokesperson declined to comment. Hua Hong did not ‌immediately respond to a petition for comment. Lam Research, Applied Materials and KLA did not instantly respond to requests for comment.

(Reporting by Karen Freifeld. Additional reporting Fanny Potkin in Singapore; Editing by Chris Sanders, Rod Nickel)

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