The US blacklisted Chinese microchip maker SMIC for exports

The United States government added dozens of Chinese companies on Friday, including the country’s leading microchip manufacturer, SMIC, on a commercial blacklist that restricts these companies’ access to US technology. Telecom giants such as Huawei and ZTE have already received the same sanctions in the past.

The measure is considered part of President Donald Trump’s latest decisions to restore his heavy-handed legacy over China. It also comes just weeks before President-elect Joe Biden takes office on January 20.

Shares of Semiconductor Manufacturing International Corporation (SMIC), China’s largest chip manufacturer and one of the largest in the world, fell 5.2% in Hong Kong this Friday afternoon after knowing the news.

The US Department of Commerce confirmed the decision early Friday and enforced the measure It responds to the Chinese doctrine of military-civilian fusion and evidence of activity between SMIC and troubling entities in the complex

Washington claims it has evidence SMIC has worked with the Chinese military to develop short and medium range ballistic missiles and exoskeletons for soldiers, But it has been arguing with the Chinese company for months about a way to avoid the fine, which ultimately could not be avoided.

Secretary of Commerce Wilbur Ross said in a statement that his portfolio “It will not allow advanced US technology to help improve the military of an increasingly belligerent adversary”.

Ross stated that the government will preemptively refuse licensing to avoid SMIC access to technology to produce semiconductors at advanced technological levels, 10 nanometers or less.

The Shanghai-based company is a supplier to Qualcomm Inc. and Broadcom Inc. and is is at the heart of Beijing’s commitment to develop a world-class semiconductor industry and stop relying on US technology.

Washington, in turn, sees the rise of China as a potential geopolitical threat. Being blacklisted could dampen the Asian country’s long-term ambitions by denying it access to critical equipment.

Total The United States has added 77 companies and subsidiaries to the so-called export blacklist, including 60 Chinese companies, including Tianjin University and Beijing Institute of Technology, as well as numerous companies. But SMIC is by far the most notable entity on the list.

The other sanctioned entities come out Bulgaria, France, Germany, Hong Kong, Italy, Malta, Pakistan, Russia and the United Arab Emirates.

China’s Foreign Ministry said the decision would show that the US is oppressing Chinese companies, so Beijing will continue to take the “necessary steps” to protect their rights.

“We urge the United States to end its misguided behavior of unwarranted repression against foreign companies”Ministerial spokesman Wang Wenbin said Friday at his regular conference in Beijing.

Designations include Chinese entities involved in alleged human rights violations and in the construction and militarization of artificial islands in the South China Sea, the department pointed out.

He also cited entities that purchased US-based products to support People’s Liberation Army programs, as well as companies and individuals who participated in the theft of US trade secrets.

Among the companies previously listed are telecommunications giants Huawei Technologies Co and 150 subsidiaries, and ZTE Corp for sanction violations, as well as surveillance camera manufacturer Hikvision for its role in suppressing the Uyghur minority in China.

With information from Reuters, AFP and Bloomberg

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