WASHINGTON: Amid escalating tensions, the United States has imposed restrictions on exports to China’s biggest silicon chip maker, Semiconductor Manufacturing International Corporation (SMIC).
The government said the equipment of SMIC could be used for military purposes.
In a letter from the Commerce Department, the exports to SMIC pose an unacceptable risk. It said suppliers of certain equipment to Chinese chip maker will now have to apply for individual export licenses.
SMIC becomes the second leading Chinese technology company to face U.S. trade curbs after telecom giant Huawei Technologies whose access to high-end chips has been clipped by its addition to an entity list.
Earlier, the Pentagon said that it was weighing blacklisting SMIC, which the U.S. authorities have identified as a threat because of an alleged fusion of civilian and military technologies.
The SMIC said it has no relationship with the Chinese military and does not manufacture for any military end-users and did not received any official notice of the restrictions. The company said it solely provides services for civilians.
The U.S. Commerce Department said its Bureau of Industry and Security was constantly monitoring and assessing any potential threats to America’s national security and foreign policy interests.
With slapping allegations on China of originating coronavirus and exporting it to the world besides tariff tiffs, the U.S. government is tightening noose around the Chinese companies.
The curbs meant that SMIC could no longer work for its largest client, which generates a fifth of the company’s revenues.
The restrictions will also hit Qualcomm, the U.S. chip designer which uses SMIC to manufacture some of its chips. Market analysts believe Qualcomm is the SMIC’s second-biggest customer after Huawei.
Huawei is still under the radar of U.S. government with its officials, now and then, issuing tirades against the Chinese telecom giant. Washington is of the opinion that Huawei is a vehicle for Chinese state espionage and enforced new curbs from September 15, barring the American companies from supplying or servicing the firm.
Huawei has time and again denied being a national security risk and called on the U.S. to reconsider its trade curbs which were hurting their suppliers around the world.
