US Adds SMIC, China’s Largest Semiconductor Manufacturer, To Export Blacklist

US administration announced that it was put China’s largest chipmaker Semiconductor Manufacturing International Corp. (SMIC) on a export blacklist. The chip-maker will be denied access to advanced US technology as US government determined that it posed risk due to close ties with Chinese military.

“We will not allow advanced US technology to help build the military of an increasingly belligerent adversary,’’ Commerce Secretary Wilbur Ross said in a statement explaining the decision to put SMIC on the US government’s so-called Entity List.

SMIC is China’s largest contract chip manufacturer and could jeopardise China’s long-standing ambitions to become self-reliant on critical technologies.

The move means that US companies will need to get a license to sell sophisticated technology to SMIC. Technology that helps with the production of the most-advanced chips -- those 10 nanometers or smaller -- face the “presumption of denial,’’ Commerce said. Other items will be assessed on a case-by-case basis.

DJI, the world’s biggest drone maker which has a dominant market share in the US, had also added to the restricted list over accusations that it enabled human rights abuses in China and elsewhere.

The Trump administration has often used the entity list to target Chinese industries, from telecoms equipment giants Huawei Technologies and ZTE over sanction violations, to surveillance camera maker Hikvision over suppression of China's Uighur minority.

The U.S recently blacklisted 24 Chinese companies and targeted individuals it said were part of construction and military actions in the South China Sea,

U.S administration is of the view that SMIC is deeply embedded in military projects and might be helping China’s defense infrastructure.

A recent reasearch report by US defence contractor SOS International said that SMIC worked with one of China’s largest defence companies, and that university researchers associated with the Chinese military were designing projects to use SMIC technology. It might be “impossible” for the researchers’ efforts to use chips made anywhere else, SOS added.

SMIC has rejected the allegations that it is connected to Chinese defence establishment. It maintains that it offers chips and services “solely” for civilian uses, and that it had “no relationship with the Chinese military.”