The U.S. government has approved China’s largest chipmaker, further hurting the country’s semiconductor industry after cutting Huawei from its chip suppliers.
On Friday, the U.S. The department’s commerce department told the companies that Semiconductor Manufacturing International Corporation’s (SMIC) exports posed an “unacceptable risk” of turning to “military end-use”, according to a copy of a letter seen by the Financial Times.
The move threatens to cut off China’s largest chipmaker, US critical software and chipmaking devices. Companies now have to offer such products to SMIC. A license is required to export to.
“It all depends on how the US applies this. In the worst case scenario, SMIC Completely cut, which will seriously bring back China of its ability to make chips. This will be a helpful point for US-China relations, “said Paul Traillo, head of tech policy analysis at Consultancy Eurasia Group.
SMIC The new sanctions come after the Trump administration imposed fines on a wide range of Chinese tech companies and the U.S. The social media applications have been implemented after they were threatened to shut down Ticket OK and WeChat.
SIMC, a “national champion” who is crucial to the government’s hopes of achieving chip self-sufficiency, became the country’s largest public disclosure for a decade when it raised .6 7.6bn in Shanghai earlier this year Was.
SMIC has already been hit by tightening US sanctions on Huawei. This meant that SMIC would no longer be able to serve its largest customer, making up one-fifth of its revenue. The chipmaker has included U.S. in its IPO prospectus. The sanctions warned of the risk of further deterioration.
The impact of these sanctions on the U.S. The chip designer will also fall on Qualcomm, which uses SMIC to make some of its chips. Analysts believe that Qualcomm is SMIC’s second largest customer after Huawei.
SMIC on Saturday. He said he would continue to engage with the U.S. Department of Commerce. The company reiterated that it has “no affiliation with the Chinese military, and does not produce for any military end users or end use.”
SMIC He added that he had not received any formal notification of sanctions.
Beijing’s foreign ministry has previously expressed opposition to US sanctions on Chinese companies. Last weekend, China’s Ministry of Commerce announced broad powers to block the operations of foreign companies considered “unreliable”, such as companies that “boycott or cut off supplies” to Chinese companies.
Lawyers are concerned that Beijing’s “list of unreliable companies” could be used to punish foreign companies that have imposed US sanctions against Chinese companies, tying such companies between US and Chinese law.
U.S. According to government sources, the proposal to blacklist SMIC was made by the Pentagon because it was concerned that the company would enable technological advances in China’s military.
U.S. The pressure has prevented SIIC from buying the devices needed to make cutting-edge chips the way Huawei needs it, but it will no longer be able to buy it for its smartphones.
Since last year, the Dutch company ASML, the sole manufacturer of advanced machines required to make high-end logic chips, has been unable to obtain a license to export to SMIC.
The U.S. can support the development of military systems in the countries that Washington sees. The purpose of the new rules to curb the export of technology was announced by the Commerce Department in April. They sharply increased the control of military end users in existing export control regulations, and in particular sought to counter China’s efforts to support the development of weapons with civilian companies through its “military-civilian integration” strategy.
The new rules sharply expanded the scope of products subject to military end-user licensing, and expanded the definition of military use to include items that may not be components of the final product, such as items used to support development or production.
The U.S. Department of Commerce said: Monitors and evaluates any potential threats to national security and foreign policy interests. While we cannot comment on any specific matter, BIS, along with its inter-agency partners, guarantees to take appropriate action. “
