Trump administration weighs blacklisting China’s chipmaker SMIC

Washington, September 5

The Trump administration is contemplating whether or not so as to add China’s prime chipmaker SMIC to a commerce blacklist, a Defence Department official stated on Friday, because the United States escalates its crackdown on Chinese corporations.

A Pentagon spokeswoman stated the Defence Department was working with different businesses to find out whether or not to make the transfer in opposition to Semiconductor Manufacturing International Corporation, which might drive the US suppliers to hunt a difficult-to-obtain license earlier than transport to the corporate.

SMIC and the Chinese Embassy in Washington didn’t instantly reply to requests for remark.

Earlier this week, the Pentagon made a proposal to put SMIC on the entity record to the End User Committee, a panel led by the Commerce Department that additionally consists of the State and Energy Departments and makes choices about entity listings, an individual accustomed to the matter stated. It was not clear whether or not the opposite businesses supported the plan.

The Trump administration has typically used the entity record — which now consists of greater than 275 China-based corporations — to hit key Chinese industries, from telecoms gear giants Huawei Technologies and ZTE over sanction violations, to surveillance digital camera maker Hikvision over suppression of China’s Uighur minority.

SMIC is the most important Chinese chip producer however is second-tier to rival Taiwan Semiconductor Manufacturing Co Limited, the trade’s market chief. It has sought to construct out foundries for the manufacture of laptop chips that may compete with TSMC.

But it is usually going through new restrictions from Commerce that require Huawei’s chip producers to hunt the US licenses earlier than producing chips for the telecoms big in the event that they depend on the United States chipmaking expertise. SMIC is certainly one of Huawei’s producers.

The US corporations, together with Lam Research, KLA Corp and Applied Materials, which provide key chipmaking gear, might be impacted by a possible entity itemizing, trade sources stated.

While the Pentagon official didn’t define the explanations for the motion, SMIC’s relationship to the Chinese navy is beneath scrutiny, one other US official and two former officers briefed on the matter stated.

The administration has more and more educated its concentrate on Chinese corporations that bolster Beijing’s navy. Last month, the United States blacklisted 24 Chinese corporations and focused people it stated had been a part of development and navy actions within the South China Sea, its first such sanctions in opposition to Beijing over the disputed strategic waterway.

The Defence Department has launched two lists of Chinese corporations up to now few months that it claims are owned or managed by the People’s Liberation Army. The designation offers President Donald Trump the authority to put them on a fair harder blacklist however thus far, no motion has been taken. Reuters

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