Chinese chipmaker YMTC is asking American employees to leave the company

Chinese memory chip giant Yangtze Memory Technologies Corp (YMTC) is reportedly asking its American employees to leave the company due to the US government’s new restrictions designed to quash China’s semiconductor manufacturing ambitions.

Citing four people close to the firm, the Financial Times reports that an unspecified number of US citizens and green card holders are being forced to leave YMTC, and several in China have already been shown the door.

Some of the Americans who left were said to have been key to YMTC’s breakthroughs in the area of NAND memory chip production. “But there’s no other way around [them leaving],” said a senior engineer at the company.

The US sanctions introduced earlier this month restrict shipments of American-made electronics or other items that China could use to create chipmaking tools or equipment. It also prevents non-Chinese companies in other countries from using American equipment to service Chinese customers unless granted a license by the US.

TSMC has already warned of the “serious challenges” the industry is facing as a result of the US/China spat. However, the Taiwanese firm was granted a one-year license by the US to continue ordering American chipmaking equipment that will allow it to expand in China.

The restrictions also require US citizens to seek permission from the Department of Commerce before providing support to Chinese fabs. It’s suspected to be the reason why YMTC chief executive Simon Yang, a US passport holder, stepped down to become deputy chair before the sanctions were announced. It’s unclear if he will be forced to leave the company.

“Asking staff to resign is necessary for the company and the right move for employees’ personal risk as well,” said a person familiar with the situation at YMTC.

“You either give up your citizenship or quit your job,” said one Chinese semiconductor executive.

This marks another blow for YMTC. There were reports that Apple was considering the Chinese company as a partner to supply 3D NAND chips for the latest iPhones, but the US export controls led to a rethink by Apple.

The restrictions are impacting employees, including top-ranking officials, who won’t give up their US passports at all Chinese chipmakers, with companies negotiating exits and rescinding job offers. “Now we are not just trying to build up ‘US-free’ manufacturing lines but also de-Americanise the teams,” said one executive.