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US slams sanctions on China’s biggest chip manufacturer

The front gate of SMIC's factory in Shanghai. (Alex Plavevski-EPA-EFE-Shutterstock)

The US has imposed restrictions on exports to China’s biggest chipmaker, SMIC, after concluding there is an “unacceptable risk” equipment supplied to it could be used for military purposes.

Suppliers of certain equipment to Semiconductor Manufacturing International Corp will now have to apply for individual export licences, according to a letter from the US commerce department dated Friday.

The latest move marks a shift in US policy from earlier this year, when applicants seeking “military end user” licences to sell to SMIC were told by the commerce department that the licences weren’t necessary, according to three people familiar with the matter.

SMIC said it had not received any official notice of the restrictions and said it has no ties with the Chinese military. “SMIC reiterates that it manufactures semiconductors and provides services solely for civilian and commercial end-users and end uses,” it said. “The company has no relationship with the Chinese military…”

SMIC is the latest leading Chinese technology company to face US trade restrictions related to national security issues or US foreign policy efforts. Telecommunications giant Huawei Technologies had its access to high-end chips curtailed by its addition to a commerce department blacklist known as the Entity List.

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