US squeezes China’s biggest chip-maker SMIC


The US Department of Commerce has written to American suppliers of China’s biggest chip manufacturer, warning them of “unprecedented risks” that their products could be used by the Chinese military.

In the letter, the firms are reminded that they must apply for licences to ship controlled items to Shanghai-based SMIC.

But it does not appear that Washington has decided whether or not to add the firm to a trade blacklist.

SMIC has denied any military links.

And it said it had not received any formal notice of new restrictions from the US.

But the latest action caused Semiconductor Manufacturing International Corporation’s shares to drop about 7% in Hong Kong trade.

The fall comes after a steeper decline earlier this month when the Pentagon first revealed it had proposed tougher restrictions against the business, including adding it to the government’s Entity List.

That is said to prevent any company selling goods or services to SMIC that involved US intellectual property without first getting special permission.

Chinese state media had previously reported that SMIC was among many companies that had requested a US licence to continue supplying Huawei.

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