SMIC, China’s largest chipmaker, added to blacklist by U.S. government

The Trump administration on Friday added 60 Chinese institutions to the Commerce Department’s Entity List, essentially prohibiting companies from exporting U.S.-developed technology without a license. One of the biggest names on the list is drone-maker DJI, but there’s another recent addition that’s also significant: Semiconductor Manufacturing International Corporation, or SMIC.

SMIC is China’s single largest contract chipmaker, so the repercussions could be far-reaching. The designation will essentially restrict the company from acquiring the necessary technology to build chips with newer process nodes. For context, the leading contract chipmakers—TSMC and Samsung—have already moved on to fabricating chips using a 5nm process.

“We will not allow advanced U.S. technology to help build the military of an increasingly belligerent adversary,” said Commerce Secretary Wilbur Ross (via Engadget). “Between SMIC’s relationships of concern with the military industrial complex, China’s aggressive application of military civil fusion mandates and state-directed subsidies, SMIC perfectly illustrates the risks of China’s leverage of U.S. technology to support its military modernization.”

Today’s news comes as little surprise. Back in September, reports suggested the Trump administration was considering such a ban because of SMIC’s links to China’s defense sector. Those claims have since been substantiated, prompting today’s addition to the blacklist.

The Trump administration has become tougher against China-based companies over accusations of state backing and ties to the country’s military. The most notable company the Trump administration added to the entity list is Huawei, which has since been cut off from licensing Google Mobile Services as well as contracts for fabricating its ARM-based HiSilicon chips.

Today’s ban on SMIC is even worse news for Huawei. As we mentioned in our previous coverage, up until now, SMIC was the only chipmaker safe from U.S. restrictions that prevented other chipmakers from supplying chips to Huawei. In fact, SMIC supplied Huawei with the 14nm HiSilicon Kirin 710A chipset earlier this year. But now that SMIC has also been blacklisted, it’s likely they won’t be able to improve their foundries without being able to access U.S.-developed components and technologies. The Commerce Department says that any technology necessary to help the firm achieve a 10nm process or below is subject to a “presumption of denial.”

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