Semiconductor Manufacturing International (SIMC) has recently come under fire from the US government. It has been accused of playing a role in Chinese military development.
US regulators are now considering adding the SMIC to its list of foreign buyers that need government permission to acquire US technology or components. SMIC is a Shanghai-based company and a leader in the semiconductor industry. It was built by the ruling Communist Party in an effort to reduce China’s reliance on foreign technology.
However, SMIC has denied such claims and has noted that it had been in “complete shock” since hearing this.
The result of SMIC being blacklisted will not only be devastating for the company but also for its US-based suppliers. Big names like Applied Materials, KLA Corp, and Lam Research will all take a major hit in their export business.
The company in an official statement has said, it is “open to sincere and transparent communication” with Washington to resolve “potential misunderstandings.”
The US-Chinese tariff war erupted in 2018. The result for this was Washington’s complaints about Beijing’s technology ambitions. China has been accused of trying to steal the technology from foreign companies.
Owing to this, the Trump administration is trying to block Chinese access to US technology, as it worries it might be used in the development of weapons. It’s also noted that the US government is worried that the Chinese government is trying to develop competitors for the American industry.
SMIC had previously reported having received “validated end-user status” by the US government. It allowed the Shanghai-based company to export US technology without applying for a license for each shipment.
What’s Next for Semiconductor Giant?
SMIC is the largest semiconductor provider to Chinese companies including Huawei and it also has international clients including Qualcomm.
Via(Business-Standard)
Analysts have claimed that trade on SMIC by the US government could threaten the very existence of the company. Not to mention it will even disrupt china’s Made in China 2025 strategy. However, while a trade blacklist will decrease the overall prospects of SMIC. It is still implied that it might give Beijing’s goal of being less dependant on western technology a fresh boost.
The Chinese mobile industries such as Huawei are developing their own processor chips. But the factories that manufacture the chips, require US technology to do so. And owing to the US regulations on these industries, china’s mobile market has taken a major hit.
Sources: BBC
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