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WASHINGTON (Reuters) – The Trump administration is considering whether to add China’s top chipmaker SMIC to a commercial blacklist, a Defense Department official said, as the United States intensifies its crackdown on Chinese companies.
A Pentagon spokeswoman said the Department of Defense was working with other agencies to determine whether to take the initiative against Semiconductor Manufacturing International Corporation, which would force US suppliers to seek a hard-to-obtain license before sending it to the company.
SMIC said in a statement Saturday that it was “completely shocked” by the news, but was open to communicating with US government agencies in hopes of resolving any misunderstandings. The Chinese embassy in Washington did not respond to requests for comment.
Earlier this week, the Pentagon made a proposal to place SMIC on the entity list to the End User Committee, a panel led by the Department of Commerce that also includes the Departments of State and Energy and makes decisions on lists of entities. entities, a person familiar with the matter. said. It was unclear whether the other agencies supported the plan.
The Trump administration has often used the list of entities, which now includes more than 275 China-based companies, to target key Chinese industries, from telecom equipment giants Huawei Technologies and ZTE for sanctions violations, to camera maker. Hikvision watchdog for the suppression of China’s Uighur minority. .
SMIC is the largest Chinese chip maker, but is second-tier to compete with Taiwan Semiconductor Manufacturing Co Ltd, the industry market leader. It has sought to build foundries for the manufacture of computer chips that can compete with TSMC.
But it also faces new trade restrictions that require Huawei’s chipmakers to seek US licenses before producing chips for the telecoms giant, if they rely on US chip-making technology. SMIC is one of Huawei’s manufacturers.
US companies, including Lam Research, KLA Corp and Applied Materials, which supply key chip-making equipment, could be hit by a possible list of entities, industry sources said.
While the Pentagon official did not describe the reasons for the action, SMIC’s relationship with the Chinese military is under scrutiny, another US official and two former officials briefed on the matter said.
In Saturday’s statement, SMIC said it had no ties to the Chinese military.
The administration has increasingly focused on Chinese companies bolstering Beijing’s military. Last month, the United States blacklisted 24 Chinese companies and targeted people it said were part of military and construction actions in the South China Sea – the first such sanctions against Beijing in the way strategic river in dispute.
The Defense Department has published two lists of Chinese companies in recent months that it claims are owned or controlled by the People’s Liberation Army. The designation gives President Donald Trump the authority to place them on an even tougher blacklist, but no action has been taken so far.
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