SMIC says yet to receive US notice on export restrictions

Reuters
Washington has ordered US companies to seek permission before selling their technologies to Chinese semiconductor giant SMIC.
Reuters

China’s biggest chipmaker SMIC said it had not received any official notice of United States restrictions after media reported Washington has ordered American companies to seek permission before selling their technologies to SMIC.

Suppliers of certain equipment to Semiconductor Manufacturing International Corp will now have to apply for individual export licenses after it was concluded that there is an “unacceptable risk” equipment supplied to it could be used for military purposes, according to a letter from the US Commerce Department dated Friday and seen by media.

SMIC said it had not received any official notice of the restrictions and said it has no ties with the Chinese military.

“SMIC reiterates that it manufactures semiconductors and provides services solely for civilian and commercial end-users and end-uses,” it said.

“The company has no relationship with the Chinese military and does not manufacture for any military end-users or end-uses.”

SMIC is the latest leading Chinese technology company to face US trade restrictions related to national security issues or US foreign policy efforts. Telecoms giant Huawei Technologies had its access to high-end chips curtailed by its addition to a commerce department blacklist known as the “entity list.”

SMIC’s new designation is not as severe as being blacklisted, which makes it difficult to get any export license approved.

The Pentagon earlier this month said it was working with other agencies to determine whether to blacklist SMIC for its purported links to the Chinese military.

“There’s been a lot of coverage on the Trump administration’s actions regarding TikTok, but the more significant action — from a global economic standpoint and that will have considerable ripple effects through global supply chains — are the increasing restrictions on SMIC and other Chinese national champions like Huawei,” said Nicholas Klein, a Washington lawyer who specializes in international trade.

US companies including Lam Research, KLA Corp and Applied Materials, which supply chipmaking equipment, may now need to get licenses to ship certain goods to SMIC.

It is unclear which suppliers received the letter, but typically once the commerce department comes to the conclusion that there is a risk of military use or diversion, it sends that information to the firms.

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