China’s largest chipmaker Semiconductor Manufacturing International Corporation (SMIC) is in ‘preliminary exchanges’ about export restrictions with the US. As reported by Reuters, this could see SMIC’s access to its US supply chain restricted.
U.S. export restrictions have hit a number of Chinese and other overseas companies over recent weeks and months. SMIC was hit with restrictions at the end of September following U.S. claims the company has Chinese military ties.
Prior to this SMIC had to gain permission from the U.S. to supply Huawei with semiconductor chips. This formed a part of Trump’s attempt to cripple the Chinese smartphone maker.
This means as it stands SMIC is not an option for Huawei to use in order to obtain semiconductor chips. Now it looks like the US has informed SMIC’s American suppliers of new export restrictions to abide by. as reported by Phone Arena.
SMIC could be facing new export restrictions
Speculation began at the end of September that the U.S. would restrict the export of certain materials to SMIC. To do this companies would require a license to operate.
This is because the Trump administration fears that SMIC’s chips may have links to Chinese military goods. Now it seems that the U.S. has begun discussions with SMIC on this topic.
This came out because it was disclosed in a filing made by the foundry today to the Hong Kong Stock Exchange. The document states that SMIC “is conducting assessments on the relevant impact of such export restrictions on the company’s production and operation activities”.
Other reports suggest that it may be too little too late for SMIC and the U.S. has already begun moving on export restrictions. Any restrictions isolating SMIC from its U.S. supplies would be a massive problem for the company.
They rely on materials sourced from the states or from America’s allies to manufacture chips for customers. Therefore, this could majorly impact the company.
If restrictions did come into force this would make SMIC the latest tech company in China to have its business controlled by the United States.
Alongside all the issues surrounding TikTok and WeChat, China’s relationship with the U.S. gets tenser by the day. The American government fears that these companies use their footholds in the country to gain data from U.S. consumers and corporations for the use of the Chinese government.
As of yet no proof of this has surfaced. However, this has not stopped the Trump administration from taking some drastic action. How long these tensions and sanctions continue is anybody’s guess but they do not appear to be going away any time soon.