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WASHINGTON: The US government has imposed export restrictions on China’s largest silicon chipmaker after concluding that there is an “unacceptable risk” that the equipment supplied to it could be used for military purposes.
Suppliers of certain Semiconductor Manufacturing International Corporation (SMIC) equipment will now have to apply for individual export licenses, according to a Commerce Department letter dated Friday and seen by Reuters.
The latest move marks a shift in US policy from earlier this year, when the Commerce Department told applicants seeking “military end-user” licenses to sell to SMIC that the licenses were not necessary, according to three people. familiar with the matter.
SMIC said it had not received any official notice of the restrictions and said it has no ties to the Chinese military.
“SMIC reiterates that it manufactures semiconductors and provides services for civil and commercial end-users and end-uses only,” said SMIC.
“The Company has no relationship with the Chinese military and does not manufacture for any end-user or military uses.”
SMIC is the latest leading Chinese technology company to face US trade restrictions related to national security issues or US foreign policy initiatives. Telecommunications giant Huawei was limited in its access to chipsets. high-end due to its incorporation into a Department of Commerce blacklist known as an entity list.
“There has been a lot of coverage on the actions of the Trump administration regarding TikTok, but the most significant action, from a global economic point of view and that will have a considerable ripple effect through global supply chains, is the increasing restrictions about SMIC and other Chinese national champions like Huawei, “said Nicholas Klein, a Washington lawyer who specializes in international trade.
He said these actions are more likely to elicit a retaliatory response from Beijing.
The United States has taken steps to ban the popular short video app TikTok, citing national security concerns stemming from its Chinese ownership.
SMIC’s new designation is not as severe as being blacklisted, making it difficult to approve an export license.
The Pentagon said earlier this month that it was working with other agencies to determine whether to blacklist SMIC for its alleged ties to the Chinese military.
US companies, including Lam Research, KLA, and Applied Materials, which supply chip-making equipment, may now need licenses to ship certain products to SMIC.
