SMIC has had ‘preliminary exchanges’ with U.S. over export restrictions

0 Comments

SHANGHAI (Reuters) – Chinese chipmaker Semiconductor Manufacturing International Corporation has undertaken “preliminary exchanges” with the U.S. Bureau of Industry and Security regarding export restrictions, the company said on Sunday in a filing.

FILE PHOTO: FILE PHOTO: A security officer stands outside a building of Semiconductor Manufacturing International Corporation (SMIC) during its grand opening in Shanghai November 22, 2001./File Photo

“The Company is conducting assessments on the relevant impact of such export restrictions on the company’s production and operation activities,” the filing to the Hong Kong Stock Exchange said.

SMIC also said it has been operating in compliance with the relevant laws and regulations of all jurisdictions where it performs its businesses.

The company also advised shareholders and potential investors “to exercise caution when dealing in the securities of the Company.”

In September, Reuters reported that the Bureau of Industry and Security under the Department of Commerce had issued letters informing certain companies they must henceforth obtain a licence before continuing to supply goods and services to SMIC.

The letter stated that exports to SMIC “may pose an unacceptable risk of diversion to a military end use” to China.

Such measures recalled those imposed by the Department of Commerce on Huawei Technologies Co Ltd [HWT.UL}, the Shenzhen-based maker of smartphones and networking equipment.

At the time of the reports, SMIC said it had not received any notice from the Department of Commerce regarding the reported restrictions and said it had no relationship with China’s military.

SMIC is China’s largest semiconductor foundry, though it trails behind Taiwan Semiconductor Manufacturing Co Ltd, the global market leader.

Both companies rely heavily on equipment from companies based in the United States or U.S-allied countries to produce chips for clients.

Earlier this year, SMIC raised $6.6 billion in a listing in China’s tech-centric STAR Market, aiming

China chip giant SMIC shares sink on US export controls

0 Comments

Shares in China’s biggest chipmaker tumbled Monday on reports that the United States had imposed export controls on the company, the latest salvo in the countries’ battle for technological dominance.

In a new blow for China’s advanced tech ambitions, the US Commerce Department reportedly ordered companies to seek permission before selling equipment to Semiconductor Manufacturing International Corp (SMIC).

Equipment sold to the Chinese company posed an “unacceptable risk” of being diverted to “military end use”, according to a letter sent to major US computer chip firms that was seen by The Wall Street Journal and the Financial Times.

News of the letter, which was first reported Saturday, sent SMIC’s shares plunging in both Shanghai and Hong Kong on Monday, closing down seven and 3.9 percent respectively.

Asked about the new controls at a daily press conference Monday, Chinese foreign ministry spokesman Wang Wenbin said Beijing opposed Washington “abusing export controls and other restrictive measures to unreasonably suppress Chinese companies”.

Advanced tech has become one of the many battlefronts that have opened up in the past few years as relations between Beijing and Washington plummet to their lowest levels since diplomatic relations were restarted in 1979.

SMIC is China’s biggest contract manufacturer of chipsets and a key pillar of Beijing’s plans to achieve semiconductor self-reliance.

Analysts say China’s dependence on foreign — including US-made — chips hinders that national goal.

Backed by several state-owned entities, SMIC has made strides at improving China’s chip capabilities but it remains heavily reliant on imported equipment and software.

Under the new rules announced by the Commerce Department, US companies that want to sell equipment to SMIC will have to apply for a licence.

“The restriction, once implemented, will severely damage SMIC’s existing and future manufacturing capabilities, and customer trust,” Bernstein analysts led by Mark Li

U.S. sanctions on chipmaker SMIC hit at the very heart of China’s tech ambitions

0 Comments

  • The U.S. government has reportedly imposed restrictions that require suppliers to get an export license to sell certain equipment to China’s biggest chipmaker SMIC.
  • The move threatens to hit at the heart of China’s plans to boost its domestic semiconductor industry, a need that has been accelerated by the trade war with the U.S.
  • SMIC is seen as a critical part of China’s ambitions and the commerce department’s sanctions could hold back the company’s development for several years.



a circuit board: A close up image of a CPU socket and motherboard laying on the table.


© Provided by CNBC
A close up image of a CPU socket and motherboard laying on the table.

GUANGZHOU, China — The U.S. government has reportedly imposed restrictions on exports to SMIC, China’s biggest chip manufacturer, a move that threatens Beijing’s push to become more self-reliant in one of the most critical areas of technology.

Loading...

Load Error

Suppliers for certain equipment to SMIC will need to apply for an export license, according to a letter sent to companies by the U.S. Department of Commerce, reported by several media outlets. The commerce department claims there is “unacceptable risk” that equipment sold to SMIC may be diverted to “military end use.”

The move threatens to hit at the heart of China’s plans to boost its domestic semiconductor industry, a need that has been accelerated by the trade war with the U.S.

SMIC is seen as a critical part of China’s ambitions and the commerce department’s sanctions could hold back the company’s development for several years, experts warned. 

“It hits right at the core of China’s ability to be autonomous in technology,” David Roche, president of Independent Strategy, told CNBC’s “Squawk Box Asia” on Monday.

The U.S. Department of Commerce was not immediately available for comment when contacted by CNBC.

SMIC told CNBC that it has “no relationship with the Chinese military and does not

SMIC Joins the Big Bath of China Security Threats

0 Comments

(Bloomberg Opinion) — Having delivered a heavy blow to the semiconductor plans of China’s biggest technology manufacturer, the U.S. government now seems keen to knock down the nation’s biggest contract chipmaker. The action looks opportunistic.

Loading...

Load Error

Export restrictions placed on Semiconductor Manufacturing International Corp. mean U.S. companies will have to apply for a license to sell some products to the Shanghai-based chipmaker.

The rules don’t appear as strict as those placed on Huawei Technologies Co. earlier this year, according to Bloomberg News. That move ended up forcing suppliers like Taiwan Semiconductor Manufacturing Co. to stop making chips to the Chinese company’s design.

Yet the timing should raise eyebrows. The U.S. Commerce Department is implementing the ban because products sold to the chipmaker pose an “unacceptable risk of diversion to a military end use,” according to a letter from the department’s Bureau of Industry and Security, the report said.

That sounds terrifying. In reality, anything sold to any company could end up having a military use: from an operating system developed by a software maker (armies use computers), to rubber and chemicals made by industrial giants (military trucks have tires).

Despite the increased rhetoric from the Trump administration, the U.S. doesn’t apply arbitrary rules to its definition of military end use. In fact, the bureau has a set of guidelines on the topic. In April, it broadened its definition while adding China to a small cohort of nations — Russia and Venezuela being the others — for which a specific set of Export Administration Regulations apply. It outlined the likely result:

This expansion will require increased diligence with respect to the evaluation of end users in China, particularly in view of China’s widespread civil-military integration.

A month later, the department added 24 groups to its entities list because of a

China must prepare for ‘long tech march’ following U.S. restrictions on SMIC: Global Times

0 Comments

SHANGHAI (Reuters) – China must engage in a new “long march” in the technology sector now that the U.S. has imposed export restrictions on Semiconductor Manufacturing International Corp, the country’s largest chip manufacturer, Chinese state-backed tabloid the Global Times wrote on Sunday.

The unnamed author of an op-ed in the paper https://www.globaltimes.cn/content/1202232.shtml argues that the U.S’ dominance of the global semiconductor industry supply chain is a “fundamental threat” to China.

“It now appears that China will need to control all research and production chains of the semiconductor industry, and rid itself of being dependent on the U.S.,” the author wrote.

On Saturday, Reuters reported that the U.S. had sent letters to companies informing them that they must obtain a license to supply SMIC.

The letter stated that SMIC and its subsidiaries “may pose an unacceptable risk of diversion to a military end use.” SMIC has denied any ties to China’s military.

The restrictions against SMIC, and earlier ones against Huawei Technologies Co Ltd [HWT.UL], the op-ed author argues, illustrate that the U.S is leading a protracted battle of “high-tech suppression” against China.

Although companies such as Tencent Holdings Ltd and Beijing ByteDance Co Ltd have made some tech breakthroughs, they are based on U.S. chip technology, the op-ed argues.

“The foundation of the entire industry is still in Americans’ hands. For now at least. China must leap from zero to one to provide solid support for the country’s competition with the U.S.,” the author wrote.

The Global Times is a tabloid published by the People’s Daily, the official newspaper of China’s ruling Communist Party, but does not speak on behalf of the party and government, unlike its parent publication.

(Reporting by Josh Horwitz. Editing by Gerry Doyle)

Source Article