Chinese chip giant SMIC ‘in shock’ of potential US trade ban

Chinese chip giant SMIC 'in shock' of potential US trade ban
2 Min Read

Daily US Times: The stock of China’s largest chip manufacturer Semiconductor Manufacturing International Corporation (SMIC) sank after the US revealed it could be its next trade ban target.

The SMIC said it was “in complete shock and perplexity” after the Pentagon revealed it had proposed the firm be added to a government blacklist.

If the ban is executed, it would restrict suppliers from providing it with American-based tech without special permission.

Beijing said it was “firmly opposed”.

A foreign ministry spokesman accused the US of “blatant bullying” and using supposed national security concerns to break international trade rules .

The move could make SMIC the next focus of a trade clash that has already threatened one of the largest tech giants from China Huawei’s survival and forced Bytedance to negotiate the sell-off of popular video-sharing app TikTok’s American operations.

SMIC has a less advanced production line than some of its rivals. It cannot make transistors as small as it’s rival can, limiting its ability to produce some of the cutting-edge chips featured in the latest smartphones.

Despite this, the firm is an important semiconductors provider to international clients including Qualcomm and Chinese companies, including Huawei.

Analysts have said a trade ban could threaten the chip giant’s existence, and in turn set back China’s efforts to spur on the country’s semiconductor industry as part of its Made in China 2025 strategy.

Richard Windsor, founder of research firm Radio Free Mobile, told the BBC: “SMIC would be unable to update the software of any of its US machines or have personnel from suppliers helping it to get them working.”

“It would also be unable to buy any more equipment or any upgrades for new technologies. If this were to persist for the long term, it would represent an existential threat that could see the company close its doors,” he added.

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