'U.S. Orders Numerous Chip Equipment Companies To Halt Tool Shipments To Two Facilities Of Hua Hong, China's Second-Largest Chipmaker; U.S. Action Taken Over Concerns The Hua Hong Facilities May Be Involved In Advanced Chip Production' - Reuters Exclusive

• Commerce Department sent letters to US companies halting tool shipments to two Hua Hong facilities
• Halt is over concerns Hua Hong and its Huali Microelectronics may manufacture advanced computing chips
• US toolmaking industry could lose billions in sales due to restrictions

NEW YORK, April 28 (Reuters) - The U.S. Department of Commerce last week ordered numerous chip equipment companies to halt certain tool shipments to China's second-largest chipmaker Hua Hong, according to two people familiar with the matter.

The department sent letters to at least a handful of companies informing them of the new restrictions on tools and other materials destined for Hua Hong 688347.SS facilities that U.S. officials believe will make China's most sophisticated chips, the people said. Top U.S. chip equipment companies Lam Research LRCX.O, Applied Materials AMAT.O and KLA KLAC.O, each of which has significant business supplying China, were among those believed to have received a letter, the sources added.

Reuters exclusively reported in March that Hua Hong Group had developed advanced chip manufacturing technologies that could be used to produce artificial intelligence chips, a milestone in Beijing's efforts to boost tech self-sufficiency. The group's contract chipmaking business, Huali Microelectronics, was preparing a 7-nanometer chipmaking process at its Shanghai plant, sources said. SMIC, China's largest contract chipmaker, is the only domestic company that can currently make chips with 7-nm technologies, the report said. The letters from the Commerce Department also aim to prevent shipments to Huali, sources said.