What you need to know
- A new report claims the U.S. is set to add as many as 80 Chinese firms to its entity list.
- SMIC, which is China's largest chipmaker, is among the companies that are set to be added to the trade blacklist.
- The entity list already includes over 275 firms based in China.
The U.S. government is set to add as many as 80 Chinese companies to its trade blacklist, according to a new report from Reuters. SMIC, which is China's top chipmaker, is said to be among the companies that are expected to be added to the "entity list." The move comes just weeks before President-elect Joe Biden assumes office.
According to sources familiar with the matter, some of the companies and their affiliates have ties to the Chinese military and are helping it militarize artificial islands in the South China Sea. Some of them are also said to be involved in alleged human rights violations. The U.S. Commerce Department's entity list now includes over 275 Chinese companies and their affiliates, including Huawei and ZTE.
This isn't actually the first time that SMIC has been targeted by the Trump administration. In September, the Commerce Department had issued restrictions on exports to SMIC over its alleged ties with the Chinese military. It was added to a blacklist of alleged Chinese military companies last month, banning U.S. investors from buying SMIC shares. Once it is added to the entity list, SMIC will require a special license from the Commerce Department to purchase goods from American firms.
Despite being China's largest chipmaker, SMIC trails rivals such as TSMC and Samsung and relies heavily on U.S. chipmaking technology. In October, SMIC announced that it had taped out a prototype chip based on the FinFET N+1 process, which is claimed to be comparable to TSMC's 7nm process. However, it isn't expected to begin mass-producing 7nm chips before 2023.
