News Kingston and Lexar parent company team up to address Chinese memory market amidst US sanctions

[Admin]

In response to ongoing U.S.-China tensions, Kingston teams up with Longsys.

Kingston and Lexar parent company team up to address Chinese memory market amidst US sanctions : Read more

 

[AndrewJacksonZA]

Can someone please explain in legal terms how this is a work-around the sanctions, and why other companies like Nvidia can't/won't do the same?

 

[deesider]

Can someone please explain in legal terms how this is a work-around the sanctions, and why other companies like Nvidia can't/won't do the same?

It's this bit "The joint venture will function as an independent entity with full corporate governance and management capabilities".

The US sanctions aren't applied generally to any company simply because it is in China - that can't really happen legitimately because it would be in breach of WTO agreements. The 'entity list' comprises companies that are said to be under the effective control of the Chinese government, which supposedly poses a threat to US national security.

A completely independently run company can't be under the control of the Chinese government, so in theory, it can't be placed on the entity list.

 

[wr3zzz]

Can someone please explain in legal terms how this is a work-around the sanctions, and why other companies like Nvidia can't/won't do the same?

Trade sanction and entities lists are two different kinds of US "judicial long arm", i.e. extending US domestic laws to jurisdictions of other countries. The writer of this article has a long trail showing zero clue of how to do business reporting, or write proper headlines for that matter, and Tomshardware apparently no longer has editorial oversights over its writers.

The one this article deals with is the entities list. Companies do business with or in US cannot do any business with persons or companies on the US entities list. For example, Huawei is on the list but by spinning its handset business into Honor, an independent company not controlled by Huawei, Honor can continue to use Qualcomm chips and Google services. You might ask how is Huawei still making notebooks using Intel CPU. Intel has obtained special licenses to keep selling CPU to Huawei.

The other one is trade sanctions. Sanctions are about products/services. Companies that do businesses in or with US cannot sell or purchase certain goods/services to/from specific countries under specfic sanctions. This has nothing to do with ownership of companies but rather with goods/services and sources/detinations.

Nvidia has to navigate both. It cannot ship any GPU equal or better than 4090 to anyone in China because those GPU falls under sanctions. Nvidia also cannot sell anything, not just 4090 or better, to Huawei or buy anything from Huawei without US government approval because of entities list.

Per this article, while the mentioned Chinese memory maker Longsys is not on the US entities list AFAIK, two leading Chinese memory makers are added recently. By forming the joint venture, IF US decides to add Longsys to the entities list as well Kingston can ensure its business won't be interrupted because it likely has shifted the business from directly dealing with Longsys to the new joint company.

 

[AndrewJacksonZA]

Thank you.

 

[Co BIY]

Trade sanction and entities lists are two different kinds of US "judicial long arm", i.e. extending US domestic laws to jurisdictions of other countries. The writer of this article has a long trail showing zero clue of how to do business reporting, or write proper headlines for that matter, and Tomshardware apparently no longer has editorial oversights over its writers.

The one this article deals with is the entities list. Companies do business with or in US cannot do any business with persons or companies on the US entities list. For example, Huawei is on the list but by spinning its handset business into Honor, an independent company not controlled by Huawei, Honor can continue to use Qualcomm chips and Google services. You might ask how is Huawei still making notebooks using Intel CPU. Intel has obtained special licenses to keep selling CPU to Huawei.

The other one is trade sanctions. Sanctions are about products/services. Companies that do businesses in or with US cannot sell or purchase certain goods/services to/from specific countries under specfic sanctions. This has nothing to do with ownership of companies but rather with goods/services and sources/detinations.

Nvidia has to navigate both. It cannot ship any GPU equal or better than 4090 to anyone in China because those GPU falls under sanctions. Nvidia also cannot sell anything, not just 4090 or better, to Huawei or buy anything from Huawei without US government approval because of entities list.

Per this article, while the mentioned Chinese memory maker Longsys is not on the US entities list AFAIK, two leading Chinese memory makers are added recently. By forming the joint venture, IF US decides to add Longsys to the entities list as well Kingston can ensure its business won't be interrupted because it likely has shifted the business from directly dealing with Longsys to the new joint company.

Thanks for the clear explanation of an opaque subject .