U.S. to Blacklist SMIC and Dozens More China Firms, Reuters Says

The U.S. is preparing to blacklistSemiconductor Manufacturing International Corp. and dozens of other Chinese companies, Reuters reported, citing people familiar with the matter.

Shares in China’s top chipmaker slid as much as 4.3% Friday afternoon in Hong Kong after Reuters reported outgoing President Donald Trump is set to add around 80 more companies and their affiliates to the Commerce Department’s Entity List. They will join the likes ofHuawei Technologies Co. on a list that denies them access to U.S. technology from software to circuitry.

Companies including Huawei andSMIC have been caught in the middle of worsening tensions between the world’s two largest economies, which have clashed on issues from trade to the pandemic. Trump had been widelyexpected to level more sanctions against China’s national champions before Joe Biden formally took office.

The Shanghai-based company, a supplier toQualcomm Inc. andBroadcom Inc., lies at the heart of Beijing’s intention to build a world-class semiconductor industry and wean itself off a reliance on American technology. Washington in turn views China’s ascendancy as a potential geopolitical threat. A blacklisting threatens to cripple its longer-term ambitions by depriving it of crucial gear.

In response to the widening U.S. crackdown, China is planning to provide broad support for so-called third-generation semiconductors in its next five-year plan to increase domestic self-sufficiency in chip manufacturing, people with knowledge of the matter have said. SMIC, backed by the China Integrated Circuit Industry Investment Fund as well as Singapore’s sovereign fundGIC Pte and theAbu Dhabi Investment Authority, is expected to play a central role in that overall effort.

SMIC representatives didn’t immediately respond to requests for comment.

— With assistance by Edwin Chan, and Yuan Gao

Source: Read Full Article