US restricts technology sales to China’s SMIC

The Department of Commerce ‘has told US computer-chip companies that they must obtain licences before exporting certain technology to China’s SMIC

WASHINGTON • Washington has ordered US companies to seek permission before selling their technologies to Chinese semiconductor giant Semiconductor Manufacturing International Corp (SMIC), its latest salvo in the battle for technological dominance over Beijing, the Wall Street Journal reported on Saturday.

The Department of Commerce “has told US computer-chip companies that they must obtain licences before exporting certain technology to China’s largest manufacturer of semiconductors”, according to the business daily.

The new rules were announced in a letter to the industry last Friday, which says that “exports to SMIC or its subsidiaries risk being used for Chinese military activities”, the report continued.

The newspaper said the administration of US President Donald Trump has “grown more concerned about Beijing’s practice of leaning on private companies to advance its military aims”.

The Commerce Department would not comment on the matter specifically, but a spokesperson with its Bureau of Industry and Security said they are “constantly monitoring and assessing any potential threats to US national security and foreign policy interests” and “will take appropriate action as warranted”.

The report comes as the White House said it will not back down from a plan to ban new US downloads of TikTok, the popular Chinese-owned video-sharing app, over what it said are national security concerns, setting up a court showdown ahead of the yesterday deadline.

For years, China and the US have been scrapping for tech dominance. SMIC is key to Beijing’s ambition to someday achieve semiconductor self-reliance. Analysts said

China’s dependence on foreign — including US-made — chips hinders that national goal.

The issue was brought into stark relief earlier this year by the US campaign to hobble Chinese telecommunication giant Huawei Technologies Co Ltd, which Washington fears could allow China’s security state to tap into global telecoms networks.

The US Commerce Department in May announced plans to cut off Huawei’s access to global semiconductor supplies, which the company said would threaten its “survival”.

According to Bloomberg report, SMIC has not been put on the so-called US entity list, which means the restrictions are not yet as severe as those imposed on China’s Huawei. The US has reportedly said it was mulling the more severe blacklisting, which would affect exports from a broader set of companies. — AFP/Bloomberg