The United States imposed export restrictions on China’s largest chipmaker, SMIC, after concluding that there is an “unacceptable risk” that the equipment supplied to it could be used for military purposes.
Suppliers of certain Semiconductor Manufacturing International Corporation equipment will now have to apply for individual export licenses, according to a Commerce Department letter dated Friday and seen by Reuters.
The latest measure marks a shift in US policy from earlier this year, when the Commerce Department told applicants seeking “military end-user” licenses to sell to SMIC that the licenses were not necessary, according to three people. familiar with the matter.
SMIC said it had not received any official notice of the restrictions and said it has no ties to the Chinese military.
“SMIC reiterates that it manufactures semiconductors and provides services for civil and commercial end-users and end-uses only,” said SMIC.
“The Company has no relationship with the Chinese military and does not manufacture for any end-user or military uses.”
SMIC is the latest Chinese technology leader to face US trade restrictions related to national security issues or US foreign policy efforts Telecom giant Huawei Technologies saw its access to chips limited high-end for being added to a Department of Commerce blacklist known as an entity list.
“There has been a lot of coverage about the actions of the Trump administration regarding TikTok, but the most significant action, from a global economic point of view and that will have considerable chain effects through global supply chains, is the increasing restrictions about SMIC and other Chinese national champions like Huawei, “said Nicholas Klein, a Washington lawyer who specializes in international trade. He said these actions are more likely to elicit a retaliatory response from Beijing.
The United States has taken steps to ban the popular short video app TikTok, citing national security concerns stemming from its Chinese ownership.
SMIC’s new designation is not as severe as being blacklisted, making it difficult to approve an export license.
The Pentagon earlier this month, Reuters was the first to report, said it was working with other agencies to determine whether to blacklist SMIC for its alleged ties to the Chinese military.
US companies, including Lam Research, KLA, and Applied Materials, which supply chip-making equipment, may now need to obtain licenses to ship certain products to SMIC.
It is not clear which vendors received the letter, but typically, once the Commerce Department concludes that there is a risk of military use or diversion, it sends that information to companies.
The Commerce Department’s Bureau of Industry and Security declined to comment specifically on SMIC on Saturday, but said it was “constantly monitoring and evaluating any potential threats to US national security and foreign policy interests.”
The administration has increasingly focused on Chinese companies bolstering Beijing’s military. Last month, the United States blacklisted 24 Chinese companies and targeted people it said were part of military and construction actions in the South China Sea, the first such sanctions against Beijing in the way. strategic river in dispute.
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