Chinese Memory Maker YMTC Asks American Employees to Leave

US sanctions are starting to have an impact in China, limiting the talent pool considerably.

Hot on the heels of Apple deciding that using cheap Yangtze Memory Technologies Corp (YMTC) memory chips in iPhones is too risky, the Chinese company is asking American employees to leave.

As the Financial Times(Opens in a new window) reports, all American employees working in core tech positions at YMTC are being forced to leave the company. A person briefed with what's happening inside the company said, "Asking staff to resign is necessary for the company and the right move for employees’ personal risk as well."

YMTC's decision to rid itself of American employees is the inevitable reaction to sanctions imposed by the US government to limit China's access to advanced technology. Last month, YMTC chief executive Simon Yang, who holds a US passport, decided to step down from the role to become YMTC's deputy chair instead. It's unclear if he will now be forced to resign from the company.

YMTC is currently on the US government's Unverified List, which isn't punitive, but it could be moved to the Entity List (export block list) in the future. The problem being faced by the company, and every other chip company based in China, is to create manufacturing facilities that don't rely on US technology, but also to staff them with people who don't hold a US passport.

According to an industry headhunter in Shanghai, these restrictions have "halved the number of available candidates for senior positions in chipmakers and toolmakers." Filling roles with American candidates is still possible, but requires the US Commerce Department to first issue a license, which seems unlikely to happen.

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