Rumours suggest that the U.S. may add another Chinese technology company to its entity list. As reported by CNBC, the Semiconductor Manufacturing International Corporation (SMIC), which is the largest Chinese chipmaker, may find itself on that list. This would mean the company would be unable to receive U.S. made good in the future.
Tensions have continued to rise between China and the Trump administration for a while now. Moves such as the creation of Trump’s entity list and the list of ‘clean’ mobile carriers have not helped this situation.
All of this pressure from the U.S. and Trump has put a lot of pressure on the Chinese technology industry. As a result, one report suggests a worst case scenario would see Huawei exit the global smartphone market.
This pressure is currently showing no signs of abating as Trump considers more Chinese companies to add to his entity list. This will pile more pressure on China but also raise the tensions between the two countries significantly.
Trump may add another Chinese tech company to entity list
By adding another Chinese company to its entity list the U.S. demonstrates that it will not slow down in its efforts to disrupt China. The list currently has over 300 Chinese-based companies on it restricting their ability to interact with U.S. companies.
The Department of Defense is now discussing whether they should add SMIC to the list. Defense Department spokesperson made a statement on the topic.
They said, that the department is working “to determine if SMIC’s actions warrant adding them to the Department of Commerce’s Entity List.” This move comes after Virginia-based defense contractor, claimed SMIC had ties to China’s defense sector.
It also claimed that Chinese military researchers have disclosed that they use SMIC technology to manufacture chips. SMIC vehemently denied such claims. In a statement is said that the company was “in complete shock and perplexity to the news”.
Imposing these sorts of export controls on SMIC would have a big impact on U.S. companies that sell chip-making technology to China manufacturers.
This all also ties in with recent restrictions on Huawei purchasing obtaining semiconductors. Companies now require approval from the U.S. government. SMIC is one of Huawei’s manufactures.
The tensions and restrictions between the U.S. and China are clearly far from over. With the former pressuring other governments to take similar sanctions this has the potential to a global problem very soon. Unless something changes soon we could be looking at serious ramifications worldwide.