Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Exclusive: Trump administration weighs blacklisting China's chipmaker SMIC

EconomySep 05, 2020 16:15
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Idrees Ali, Alexandra Alper and Karen Freifeld

WASHINGTON (Reuters) - The Trump administration is considering whether to add China's top chipmaker SMIC to a trade blacklist, a Defense Department official said, as the United States escalates its crackdown on Chinese companies. A Pentagon spokeswoman said the Defense Department was working with other agencies to determine whether to make the move against Semiconductor Manufacturing International Corporation (HK:0981), which would force U.S. suppliers to seek a difficult-to-obtain license before shipping to the company.

SMIC said in a statement on Saturday it was "in complete shock" over the news but was open to communication with U.S. 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 Commerce Department that also includes the State and Energy Departments and makes decisions about entity listings, a person familiar with the matter said. It was not clear whether the other agencies supported the plan.

The Trump administration has often used the entity list - which now includes more than 275 China-based firms - to hit key Chinese industries, from telecoms equipment giants Huawei Technologies and ZTE (SZ:000063) over sanction violations, to surveillance camera maker Hikvision (SZ:002415) over suppression of China's Uighur minority.

SMIC is the largest Chinese chip manufacturer but is second-tier to rival Taiwan Semiconductor Manufacturing Co Ltd (TW:2330), the industry's market leader. It has sought to build out foundries for the manufacture of computer chips that can compete with TSMC.

But it is also facing new restrictions from Commerce that require Huawei's chip manufacturers to seek U.S. licenses before producing chips for the telecoms giant, if they rely on U.S. chipmaking technology. SMIC is one of Huawei's manufacturers.

U.S. companies including Lam Research (O:LRCX), KLA Corp (O:KLAC) and Applied Materials (O:AMAT), which supply key chipmaking equipment, could be impacted by a potential entity listing, industry sources said.

While the Pentagon official did not outline the reasons for the action, SMIC's relationship to the Chinese military is under scrutiny, another U.S. 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 trained its focus on Chinese companies that bolster Beijing's military. Last month, the United States blacklisted 24 Chinese companies and targeted individuals it said were part of construction and military actions in the South China Sea, its first such sanctions against Beijing over the disputed strategic waterway.

The Defense Department has released two lists of Chinese companies in the past few 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 so far no action has been taken.

Exclusive: Trump administration weighs blacklisting China's chipmaker SMIC
 

Related Articles

Hope rally turns choppy as hot U.S. inflation looms
Hope rally turns choppy as hot U.S. inflation looms By Reuters - Dec 09, 2021

By Tom Westbrook SYDNEY (Reuters) - Stocks rose in choppy trade on Thursday as worries about the economic impact of the Omicron coronavirus variant ebbed but increasing caution...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email