US puts export curbs on Chinese chipmaker Smic–financial Times

The US imposed export curbs on Semiconductor Manufacturing International Corp., the Financial Times reported, delivering a new blow to China’s technology industry and sharpening tensions over intellectual property and national security.

US firms will now need a license to export certain products to China’s largest chipmaker because of an “unacceptable risk” that the goods could be used for military purposes, the Financial Times said on Saturday, citing a letter the Commerce Department sent to the company. The Commerce Department wouldn’t immediately confirm the contents of the letter.

SMIC has not received an official notice of the sanctions, has no relationship with the Chinese armed forces and does not manufacture goods for any military endusers or uses, the Shanghai- based company said in an e- mailed statement.

Restrictions against SMIC would mark yet another escalation in the rising tensions between the world’s two most powerful countries. The US and China have clashed on issues from trade to the coronavirus pandemic to a rigid new security law in Hong Kong, imposed by Beijing.

The Trump administration first blacklisted Huawei Technologies Co., preventing the giant telecommunications provider from buying components from American suppliers and pressured allies to follow suit. Then President Donald Trump threatened to ban the video app Tiktok from China’s Bytedance Ltd. if the service wasn’t sold to American owners.

The US move against SMIC doesn’t appear to go as far as sanctions used against Huawei and some other Chinese firms. The US has said it was mulling further measures, including adding SMIC to the Commerce Department’s so- called entity list, which would affect exports from a broader set of companies.

“The military end- use rules only apply to a subset of listed US origin items. The Entity List rules apply to all US origin and some foreign- origin items,” said Kevin Wolf, an export control lawyer at Akin Gump and senior Commerce Department official in the Obama administration.