One term in the Biden administration’s new controls on semiconductor sales to China could ensnare hundreds of Chinese-American tech executives working for the country’s tech companies—and perhaps force them to choose between their citizenship or their job.
The new rules bar “U.S. persons,” who include both U.S. citizens and permanent residents, from supporting the “development or production” of advanced chips at Chinese factories without a license. It’s the first time export controls on China have extended to people, rather than just organizations or companies.
That could affect hundreds of executives and professionals with U.S. citizenship in China’s chip industry, including founders and C-suite executives, according to Nikkei Asia.
One Chinese chip company is already taking action. Naura Technology, a China-based manufacturer of chipmaking equipment, is telling its employees with U.S. nationality to immediately stop working on research projects due to the new restrictions, reported the South China Morning Post on Thursday.
Chipmaking firms outside of China are also reorganizing their teams to comply with the new rules. Netherlands-based ASML Holding, which manufactures critical chipmaking equipment, told its U.S.-based staff on Wednesday to immediately halt all engagement with Chinese customers, Bloomberg reported.
The new rules on semiconductor exports, announced by the Biden administration on Friday, are Washington’s broadest effort yet to hamper China’s semiconductor development. The controls bar sales of chipmaking equipment, as well as advanced chips made using U.S. equipment, to Chinese companies.
The U.S. has exempted some non-Chinese companies, like SK Hynix, Samsung, and Taiwan Semiconductor Manufacturing Corporation, from its new export controls for a year. Yet Chinese companies won’t get the same leniency from the U.S. Department of Commerce.
Straddling two countries
Chinese and Chinese-Americans are finding it increasingly difficult to operate in both the U.S. and China as relations between Washington and Beijing sink to new lows.
More Chinese academics are choosing to leave the U.S., citing a more hostile working environment. Over 1,400 Chinese academics gave up their U.S. affiliation in 2021, representing a 22% jump from the year before, according to data compiled by Princeton University, Harvard University, and the Massachusetts Institute of Technology.
In 2018, the Trump administration launched the China Initiative to investigate allegations of U.S.-based scientists transferring advanced technologies to China. Academics criticized the Initiative for chilling scientific cooperation and deterring Chinese academics from moving to or staying in the U.S.
Gang Chen, an MIT professor who was charged with espionage under the China Initiative in 2021, said the program brought “unwarranted fear to the academic community” after the charges were dropped a year later. The Biden administration ended the initiative in February 2022, citing a perception that it unfairly targeted people of Chinese origin or ethnicity.
Five months after the espionage charges were dropped, Chen helped discover what might be the “best semiconductor material ever found,” according to MIT.
Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.
