U.S. Targets China’s Supercomputing Push With New Export Restrictions

Date: Friday, June 21, 2019
Source: The Wall Street Journal

Commerce Department puts five Chinese developers on entity list, citing national-security concerns

WASHINGTON—The Commerce Department is taking aim at China’s supercomputing push with new export restrictions that effectively cut five major Chinese developers of next-generation high-performance computing off from U.S. technology.

The entities—Sugon of Beijing and three of its affiliates, as well as the Wuxi Jiangnan Institute of Computing Technology—have been determined “to be acting contrary to the national security or foreign policy interests of the United States,” according to a Commerce Department rule made public Friday.

The Chinese developers are at the heart of Beijing’s effort to make the country’s first exascale computer, a next-generation supercomputer that would be capable of doing one quintillion—or one billion billion—calculations a second. Supercomputing is integral to the development of nuclear weapons, encryption, missile defense and other systems, and the U.S. and China are competing for dominance in the field. Right now, the U.S. has the world’s two fastest supercomputers, followed by a Chinese-built computer in third place.

The move by the Commerce Department, which took similar action against Chinese telecommunications giant Huawei Technologies Co. just last month, could ratchet up tensions again between Washington and Beijing ahead of a planned meeting next weekbetween President Trump and Chinese President Xi Jinping amid a stalemate over trade talks.

“Sugon has publicly acknowledged a variety of military end uses and end users of its high-performance computers,” the Commerce Department rule said, adding that Wuxi Jiangnan is owned by the 56th Research Institute of the General Staff of China’s People’s Liberation Army and has a mission to support China’s military modernization.

The entity listing will affect a variety of U.S. technology firms that supply Sugon, including chip firms Advanced Micro Devices, Intel Corp. and Nvidia Corp. Intel and Nvidia declined to comment, and AMD didn’t immediately respond to a request for comment.

U.S. national security officials have long raised concerns in particular about a 2016 deal between AMD and Sugon to create a pair of joint ventures in China to produce chips licensing the U.S. firm’s x86 technology—one of its and Intel’s crown jewels. AMD has said the deal complies with all regulations.

The deal also involved Sugon unit Higon, as well as Chengdu Haiguang Integrated Circuit and Chengdu Haiguang Microelectronics Technology, in which Higon has ownership interests. Commerce’s new rule adds them all to the entity list, effectively unwinding the deal.

The Commerce rule also adds another alias for National University of Defense Technology to the entity list: Hunan Guofang Kei University. NUDT was added to the entity list back in February 2015 because of its use of U.S-origin technology “to power supercomputers believed to support nuclear explosive simulation and military simulation activities,” according to the Commerce Department. Since then, NUDT has procured items under the alias, the department found.


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