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The United States has banned US companies from selling parts to a Chinese company for reasons of national security.
The US Department of Commerce said that there was a "significant risk" that Fujian Jinhua would be involved in activities that could harm the national security of the United States.
This is the latest escalation of the Trump administration's efforts to stop the alleged theft of intellectual property.
Other countries have also imposed limits on Chinese companies for security reasons.
The US Department of Commerce said it would limit the export of software and technology products from US companies to China's Fujian Jinhua chip maker.
"When a foreign company embarks on activities contrary to our national security interests, we will take strong action to protect our national security," US Trade Secretary Wilbur Ross said in a statement.
He added that the restrictions imposed on Fujian Jinhua – which manufactures chips and memory devices – would limit "its ability to threaten the supply chain of essential components of our military systems".
US companies now need a license to export to Fujian Jinhua.
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This decision comes amid allegations that the state-funded company allegedly stole intellectual property from the US chip maker, Micron Technology, according to reports.
This decision may ignite tensions between the United States and China, as these two countries clash in a trade war and Beijing seeks to strengthen its dominance in high-tech industries.
It is also the latest in a series of actions restricting the trade of Chinese technology companies.
Earlier this year, the United States prevented ZTE China from dealing with US companies after finding that it had violated US sanctions against Iran and North Korea.
The ban, which forced the company to stop major operations, was lifted in July.
National security concerns have also led to restrictions on Chinese companies in other countries.
In August, the Australian government banned telecommunications giants Huawei and ZTE from providing 5G technology to the country's wireless networks.
The monitoring body of the British cyber defense also warned that the use of ZTE equipment and services could pose a risk to national security.
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