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Deal
The United States is ready to add dozens of Chinese companies, including the country’s top chipmaker SMIC, to a commercial blacklist on Friday, two people familiar with the matter told Reuters.
FILE PHOTO: A Semiconductor Manufacturing International Corporation (SMIC) logo is seen at the China International Semiconductor Expo (IC China 2020) in Shanghai, China on October 14, 2020. REUTERS / Aly Song / File Photo
WASHINGTON: The United States is ready to add dozens of Chinese companies, including the country’s top chipmaker, SMIC, to a commercial blacklist on Friday, two people familiar with the matter told Reuters.
The move, which has not been previously reported, is considered the latest in President Donald Trump’s effort to cement his tough legacy with China. It comes just weeks before Democratic President-elect Joe Biden takes office on January 20.
In total, the United States is expected to add about 80 additional companies and affiliates to the so-called list of entities, almost all Chinese.
The Commerce Department designations are expected to name some Chinese companies that Washington says have ties to the Chinese military, including some that helped it build and militarize artificial islands in the South China Sea, as well as some involved in alleged violations of human rights, the sources said.
The Trump administration has often used the list of entities, which now includes more than 275 China-based companies and affiliates, to target key industries in China.
These include telecommunications equipment giants Huawei Technologies Co and 150 affiliates, and ZTE Corp for sanctions violations, as well as surveillance camera maker Hikvision for suppressing China’s Uighur minority.
SMIC, Semiconductor Manufacturing International Corp, has already been in Washington’s sights.
In September, the Commerce Department ordered suppliers of certain company equipment to apply for export licenses after concluding that there was an “unacceptable risk” that the equipment supplied to them could be used for military purposes.
SMIC, the Department of Commerce and the Chinese Embassy in Washington did not immediately respond to requests for comment on Thursday.
Last month, the Department of Defense added the company to a blacklist of alleged Chinese military companies, effectively prohibiting American investors from buying its shares starting late next year.
SMIC has repeatedly said that it has no relationship with the Chinese military.
The entity list designation would force SMIC to seek a special license from the Department of Commerce before a U.S. supplier could ship key products to it, as part of a management offer to curb its access to sophisticated U.S. manufacturing technology. chips.
Commerce is also expected to add numerous SMIC-affiliated companies to the entity list, the sources said.
SMIC is the largest Chinese chipmaker, but lags behind Taiwan Semiconductor Manufacturing Co, the industry market leader. It has sought to build foundries for the manufacture of computer chips that can compete with TSMC.
Ties between Washington and Beijing have grown increasingly antagonistic over the past year as the world’s two major economies argued over Beijing’s handling of the coronavirus outbreak, the imposition of a national security law in Hong Kong and the increased tensions in the South China Sea.
(Information from David Shepardson and Alexandra Alper; additional information from Humeyra Pamuk, Mike Stone and Karen Freifeld; writing from Humeyra Pamuk; edited by William Mallard)
