The Trump administration in the United States has started a US-China trade war and has been adding sanctions on Huawei. Now, as per the report, the United States is planning to ban China’s largest semiconductor manufacturer SMIC.
SMIC relies on American chipmaking equipment. If the company gets added to the Entity List, that could make it more difficult to obtain the components needed to develop its capabilities and hurt the production of chipsets.
The ban on SMIC could badly hurt Huawei given that the company is manufacturing budget HiSilicon Kirin chipsets. As of now, SMIC is the only option left for Huawei given that it has been banned from using chipsets or its related technology by any American company.
The US Department of Defence is considering whether the chipmaker aids China’s military and defense apparatus. It alleges that SMIC worked with a large Chinese defense company and that university researchers linked to the military have tailored their work to fit SMIC’s technology. However, the company has denied those accusations.
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Semiconductor Manufacturing International Corporation (SMIC), based in Shanghai, was founded in 20000. It recently raised around $7.8 billion in a secondary listing on the Star Market in July, making it the biggest public offering in China in a decade. For this, the company withdrew its listing from the New York Stock Exchange.
Although the company ranks among the top five semiconductor manufacturers in the world, it is far behind its competitors in terms of technology. While the likes of TSMC and Samsung have started manufacturing 5nm chipsets, SMIC is still using the 14nm process for manufacturing smartphone chips.
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