US may block China’s biggest chip maker SMIC from using US technology

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After Huawei, SMIC (Semiconductor Manufacturing International Corp.) might become the next target of the US government. According to a report from Reuters, the US government is considering to put SMIC to the blocked entity list, which would block U.S. companies from selling any technology to SMIC without a government license.

If US announces the ban, SMIC’s supply chain will be disrupted, affecting its production in CMOS sensors, fingerprint sensor ICs, and power management ICs. SMIC is the largest chip manufacturer in China and this ban would definitely slow down the rise of Chinese tech dominance.

In May, U.S Department of Commerce banned TSMC, the world’s largest contract manufacturer of semiconductors, from serving Huawei and its affiliates throughout the world. Because of this ban, Huawei will stop manufacturing of its mobile chipsets from Sep 15th.

SMIC responded to the media reports with the following press release:

Reuters reported Friday, September 4 (EST), citing a Defense Department official that the Trump administration is considering whether to add China’s top chipmaker SMIC to a trade blacklist.

SMIC solemnly declares that the Company, a public company listed on the Hong Kong Stock Exchange and the Sci-Tech Innovation Board (STAR Market), is an international semiconductor foundry strictly complying with the laws and regulations of all jurisdictions where it performs its businesses. Since its inception, the Company has been fully compliant with all rules and laws. SMIC has maintained long-term strategic partnerships with multiple U.S.-based semiconductor equipment suppliers. Over the years, the Bureau of Industry and Security (BIS) has granted numerous export licenses for the Company. With a large and diverse customer base, serving companies in the U.S., Europe, and other Asian regions, SMIC plays an important role in the global semiconductor supply chain. The Company manufactures semiconductors and provides services solely for civilian and commercial end-users and end-uses. We have no relationship with the Chinese military. In and before 2016, SMIC had been granted Validated End-User (VEU) authorization by the BIS and the company hosted several visits from U.S. Government officials. Any assumptions of the Company’s ties with the Chinese military are untrue statements and false accusations. The Company is in complete shock and perplexity to the news. Nevertheless, SMIC is open to sincere and transparent communication with the U.S. Government agencies in hope of resolving potential misunderstandings.

Source: Reuters

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