US Ponders Tech Export Ban On SMIC, China's Biggest Chipmaker

The US government is contemplating a Huawei-style ban on Semiconductor Manufacturing International Corporation (SMIC), China's largest chipmaker.

SMIC is known to provide chips to Qualcomm, Broadcom, and Texas Instruments among others.

The company is listed on both the Shanghai and Hong Kong Stock exchanges, having quit the New York exchange in 2019. SMIC operates five chip-making plants in China and in documents, published ahead of its July 2020 Shanghai listing, revealed it can create just under half a million wafers a month and can deliver products built on processes from 0.35μm to 14nm. SMIC is capable of producing SoCs for mobile phones and also claims it can crank out "logic, mixed-signal/RF CMOS, high voltage, flash, EEPROM, CIS and LCoS micro-display technology."

The firm's clientele includes Qualcomm Broadcom and Texas Instruments, so its output probably ends up in products from top-tier electronics companies.

The company was founded in 2000 and has quickly achieved scale that puts it at the forefront of China's ambition to build a domestic semiconductor industry that can satisfy local demand and win more export business.

The US Department of Defense said in a statement that it "is currently working with the interagency in assessing available information to determine if SMIC's actions warrant adding them to the Department of Commerce's Entity List. Such an action would ensure that all exports to SMIC would undergo a more comprehensive review."

The Trump administration has used the Entity List to prevent Chinese firms using US technology without a licence, on grounds that they represent national security risks due to Chinese government influence and/or are involved in corporate espionage. While some licences have been issued, the likes of Huawei are reportedly now struggling to source components.

If SMIC is added to the list and US chip tech exporters do not receive licences to sell to the company, it could struggle to continue some production.

In a statement on Saturday, SMIC denied it has any ties with the Chinese military and said it was "strictly complying with the laws and regulations of all jurisdictions where it performs its businesses."

"The company is in complete shock and perplexity to the news. Nevertheless, SMIC is open to sincere and transparent communication with US government agencies in hope of resolving potential misunderstandings," it said in a statement. ®