FILE PHOTO: Chinese and U.S. flags flutter near the Bund in Shanghai, China July 30, 2019. REUTERS/Aly Song/File Photo

HONG KONG (Reuters) – Hong Kong-listed shares of Semiconductor Manufacturing International Corp fell more than 7% on Monday after the United States imposed restrictions on exports to China’s biggest chip maker, citing a risk of military use.

SMIC’s shares fell as much as 7.9% to HK$17.12 ($2.21), the lowest since May 29, and were last down 6.7%.

The company said it had not received any official notice of the restrictions and added it has no ties with the Chinese military.

Suppliers of certain equipment to SMIC will now have to apply for individual export licenses, according to a letter from the U.S. Commerce Department dated Friday and seen by Reuters.

Earlier this year SMIC raised $6.6 billion in a secondary listing on Shanghai’s tech-centric STAR market.

The company said it intended to use the funds to build out additional capacity for producing advanced chipsets.

SMIC recently began manufacturing chips at the 14 nanometer process node, about two generations behind the technology used by rival Taiwan Semiconductor Manufacturing Co Ltd.

The restrictions, however, throw a wrench in SMIC’s plans as it relies on equipment produced by companies hailing from the U.S. or U.S-allied nations.

Following news of the restrictions, an op-ed published on Sunday in the Global Times, a tabloid owned by state-backed media outlet People’s Daily, called for China to embark on a “long tech march” to counter the U.S.’ high-tech suppression against China.

Reporting by Donny Kwok in Hong Kong and Josh Horwitz in Shanghai; Editing by Kim Coghill and Shounak Dasgupta

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