WASHINGTON (Reuters) – The U.S. Department of Commerce must impose trade restrictions on Chinese memory chip maker Changxin Memory Technologies after Beijing earlier this week banned the sale of some chips by U.S. firm Micron Technology Inc (MU.O). said the chairman of the US House Committee on China on Tuesday.

The restrictions imposed on Micron by China’s cyber regulator are the latest in a widening trade dispute between the world’s two largest economies. China’s move drew tough language from key lawmakers and the White House.

White House press secretary Karen Jean-Pierre told reporters on Tuesday that China’s announcement on microns “is not based on reality.”

The White House said the Commerce Department is “working directly” with China via Micron, a maker of memory chips essential for products from cell phones to data center servers.

Senate Majority Leader Chuck Schumer, the Senate’s top Democrat, also said Tuesday that he’s talking to the broader business community and allies about the issue.

A spokesman for the Chinese Embassy in Washington did not immediately respond to a request for comment. A representative for CXMT could not immediately be reached for comment.

A Commerce Department spokesman declined to comment.

Representative Mike Gallagher, an influential lawmaker whose select committee on China has pressed the Biden administration to take tougher stances on China, is the only lawmaker so far calling for retaliatory action.

Gallagher said in a statement that the United States “must make it clear to the People’s Republic of China that it will not tolerate economic coercion against its companies or allies.” “The Department of Commerce should immediately add ChangXin Memory Technologies to its Entity List and ensure that no U.S. technology, regardless of specification, passes to CXMT, YMTC, or other PRC companies in this industry.”

CXMT is the leading manufacturer of DRAM memory chips in China and the local competition that is likely to benefit if Micron is banned from the huge Chinese chip market.

YMTC, or Yangtze Memory Technologies Corp., is a Chinese chip manufacturer which was listed by the entity list in December 2022.

Gallagher also said the Commerce Department should ensure “that no US export licenses granted to foreign semiconductor memory companies operating in (China) are used to refill Micron, and our South Korean allies, who tested exactly this type of CCP (Chinese Communist Party),” Gallagher said. The direct economic coercion of recent years should work similarly to prevent backfilling.

Korea’s Samsung Electronics Co Ltd (005930.KS) and SK Hynix (000660.KS), which operate memory chip factories in China, and other non-Chinese companies have escaped the brunt of US export controls on chipmaking equipment imposed in October, but they They operate under exceptions to US rules that can expire or be rescinded.

Samsung and SK Hynix did not immediately respond to requests for comment.

Analysts believe that CXMT chips are two to three generations behind industry leaders Micron, Samsung and SK Hynix.

Gallagher’s call comes weeks after US chipmaking equipment makers said they had received clarification from US export control authorities that would allow them to ship more tools to China than initially expected.

Lam Research Corp. (LRCX.O), a leading manufacturer of memory chip manufacturing tools, told investors that the clarification could lead to hundreds of millions of dollars in additional sales from China.

Clarification from the Department of Commerce relates to how memory stick features are measured for the purposes of export control enforcement.

How these chips are measured can vary depending on the tools and materials used to make them and how they are designed, said Dan Hutcheson, vice president of TechInsights Inc, which produces research reports on the semiconductor industry.

Even among memory chip makers and buyers, Hutchison said, “this controversy tends to be great.”

(Covering) By Chris Sanders and Ramy Ayoub Editing by Chris Reese

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