The OpenAI report today hit chipmakers hard and now there is this: Reuters reports that the US Department of Commerce ordered chip equipment makers, including Applied Materials (AMAT), Lam Research (LRCX), and KLA (KLAC), to halt certain tool shipments to Hua Hong, China’s…
The OpenAI report today hit chipmakers hard and now there is this: Reuters reports that the US Department of Commerce ordered chip equipment makers, including Applied Materials (AMAT), Lam Research (LRCX), and KLA (KLAC), to halt certain tool shipments to Hua Hong, China’s second-largest chipmaker. Shares came under further modest pressure on the report as they were already down 5-6% today.
The restrictions target tools officials believe could help China make its most advanced chips. Reuters previously revealed Hua Hong had developed advanced manufacturing tech that could produce AI chips, with its contract subsidiary Huali Microelectronics preparing 7-nanometer production at its Shanghai plant — a capability previously limited to SMIC. The Commerce Department letters also block shipments to Huali.
The move continues Washington’s policy of safeguarding U.S. leadership in AI chips on national security grounds and arrives just before President Trump’s planned May meeting with Xi Jinping. Suppliers warn they could lose billions in sales, particularly if Chinese fabs under construction get retooled with European or Japanese alternatives. Context on the Companies Lam Research, Applied Materials, and KLA are three of the world’s largest semiconductor equipment makers, supplying the etching, deposition, and process-control tools fabs need to manufacture chips.