US tightens export controls on China's top chipmaker

US tightens export controls on China's top chipmaker

TAIPEI -- The U.S. is tightening export controls on Semiconductor Manufacturing International Co., China's top chipmaker, citing an "unprecedented risk" posed by the company's alleged links to the military. In a letter dated Sept. 25 and seen by the Nikkei Asian Review, the U.S. Department of Commerce instructs American companies to apply for licenses in order to ship certain controlled items to SMIC. The move further escalates the Trump administration's crackdown on Chinese tech companies and is likely to ratchet up tensions with Beijing. According to the letter, the department's Bureau of Industry and Security "has determined that exports to SMIC or its subsidiaries may pose an unprecedented risk of diversion to a military end-use of the People's Republic of China." Accordingly, suppliers "must submit an application for an individually-validated license prior to exporting, reexporting, or transferring in-country." SMIC, China's biggest contract chipmaker, is at the heart of Beijing's ambition to build a competitive domestic semiconductor industry and reduce the country's reliance on foreign suppliers. When presented with a copy of the letter by Nikkei, SMIC said it will "continue to engage constructively and openly with the U.S. Department of Commerce." The company reiterated that "it manufactures semiconductors and provides services solely for civilian and commercial end-users and end-uses. The Company has no relationship with the Chinese military and does not manufacture for any military end-users or end-uses." Multiple industry executives told Nikkei that SMIC is aware of the risks of tighter U.S. export ...
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