Supercomputer Industry
Computer network equipment is seen in a server room (Photo: Reuters / Heinz-Peter Bader)

The US has now made its latest move to push ahead in the country's ongoing tech cold war with China. The US Commerce Department announced that it will be imposing trade restrictions on five Chinese companies that are involved in the development and manufacturing of supercomputers and supercomputer components.

As part of the new restrictions, US companies are no longer allowed to do business with the companies included in the so-called "entity list." The primary supercomputer firms on the list are the Wuxi Jiangnan Institute of Computing Technology and Sugon.

The other three Chinese firms are companies that have direct ties with Sugon. According to the agency, these companies were deemed as threats to the US' national security.

The Commerce Department mentioned in its Federal Register notice that all US companies should cut business ties with the aforementioned Chinese firms starting this week. The agency explained in its notice that the Chinese firms have been found to be using their technologies to support the Chinese military and China's nuclear efforts.

The US will apparently only grant certain US companies the ability to import and export components to and from these companies. Only those with licenses from the Commerce Department will be allowed to continue transactions starting this week. The restrictions are similar in nature to the recently imposed trade restriction on the Chinese telecommunications giant Huawei.

The newly imposed trade restriction is a heavy blow to China's supercomputer industry. Companies such as Sugon are pretty much dependent on the components being supplied by US companies such as Intel, Nvidia, and AMD. Sugon uses components from various companies around the world to manufacturer supercomputer systems and advanced scientific equipment.

Given the new restrictions on US components, Sugon and Wuxi Jiangnan Institute of Computing Technology will likely have to resort to finding suppliers outside of the United States. The restrictions also pose a threat to the ongoing partnerships between US companies and Chinese firms. AMD currently has a standing partnership with a holding company partly owned by Sugon.

The partnership resulted in the establishment of two joint ventures, namely Chengdu Haiguang Integrated Circuit and Chengdu Haiguang Microelectronics Technology. Both of the companies were specifically mentioned in the Commerce Department's notice.

While supercomputers can be used for the military are nuclear applications, there are actually less harmful uses of the technology. Supercomputers are often used for advanced scientific research, medical treatments, and weather prediction.

The United States and China have been fiercely competing in a particular space for the past few decades. China had been holding the top position for having the world's fastest supercomputer up until the US beat it last year.