U.S. to consider adding SMIC, China's largest semiconductor company, to its blacklist

SMIC benefits from increased domestic demand due to Huawei sanctions.

Engadget JP (Translation)
Engadget JP (Translation) , @Engadget_MT
2020年09月7日, 午後 07:39 in egmt
Qilai Shen/In Pictures Ltd./Corbis via Getty Images
Qilai Shen/In Pictures Ltd./Corbis via Getty Images

This article is based on an article from the Japanese edition of Engadget and was created using the translation tool Deepl.

The U.S. Department of Defense has reportedly proposed that Chinese semiconductor manufacturer SMIC (Semiconductor Manufacturing International Corporation) be placed on the ‘entity list’ of undesirable trading partners.

Reuters reported that the information was obtained from people familiar with the matter. It is not clear whether other government agencies support the plan, it said.

The U.S. government now lists 275 Chinese companies on its entity list, including Huawei, ZTE, and surveillance camera maker Hikvision for their involvement in the crackdown on the Uyghurs. And it has decided to add SMIC, China's largest semiconductor maker and the second-largest semiconductor manufacturing company in the world after TSMC, to that list.

According to the Wall Street Journal, the SMIC has concerns that it may be part of China's defense infrastructure; the SMIC issued a statement denying the allegations and claiming it has "no connection" to China's military.

However, U.S. defense contractor SOS International says SMIC is involved in the deepest part of the military project. Reuters also reports that two former government officials briefed on the issue said another government official said SMIC's relationship with the Chinese military was under scrutiny.

The U.S. government last month also put 24 Chinese companies or individuals on the entity list, including those allegedly involved in illegal development and military operations in the South China Sea.

If the U.S. decides to add SMIC to the entity list, the rift in U.S.-China trade may deepen further. Chinese companies dealing in components that rely on U.S. technology and have little or no substitute will find it very difficult to grow or maintain. On the other hand, the reverse could also be true, damaging U.S. companies that manufacture in China and rely on Chinese components.

Source: Reuters, Wall Street Journal

This article is based on an article from the Japanese edition of Engadget and was created using the translation tool Deepl. The Japanese edition of Engadget does not guarantee the accuracy or reliability of this article.

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