This week, China Semiconductor Manufacturing International Corporation (SMIChas entered the list of companies that, in the understanding of the US government, have shady ties with the Chinese military. Company is simply Largest chip manufacturer in China.
The decision is not surprising. It has been a while since the US government required US companies to obtain a business license with SMIC because they consider the company to be controlled or related to the Chinese military force.
Although SMIC does not have the structure for today’s advanced chip production, the company has been receiving investments from the Chinese government as part of the country’s effort to reduce reliance on technology. of the US in the semiconductor segment.
But these efforts pay off only in the long run. For now, the restrictions on SMICs are quite harmful as they can prevent a company from buying US-originating equipment for factory facilities.
Other Chinese companies, such as state-owned oil and gas CNOOC, also included on the list, now have 35 names. They can be restricted by many different types.
To give an example, President Donald Trump recently signed an executive order preventing US investors from buying shares of listed companies from late 2021.
SMIC is seen as a potential chip supplier to Huawei, because of trade restrictions imposed by the United States, it is no longer possible to buy processors from companies like Qualcomm or order semiconductors from manufacturers. like TSMC. Listing of SMICs may interfere with these plans.
In a letter to investors, SMIC stated that they strongly opposed the measure, and it reflected a major misunderstanding by the US government about its business and technology purposes.
The Ministry of Foreign Affairs of China stated that “the United States must stop abusing concepts of national power and national security to damage the operations of foreign companies”.