US sanctions China’s biggest chipmaker

[ILC]

China’s biggest chipmaker SMIC hit by US sanctions

Move further hurts semiconductor sector after penalties on Huawei

www.ft.com

Paywall - if someone can post.

 

[Chhatrapati]

The US government has sanctioned China’s biggest chipmaker, dealing further damage to the country’s semiconductor industry after cutting Huawei off from its chip suppliers. On Friday, the US Department of Commerce told companies that exports to Shanghai Manufacturing International Corporation (SMIC) posed an “unacceptable risk” of being diverted to “military end use”, according to a copy of the letter seen by the Financial Times. The move threatens to cut off China’s biggest chipmaker from crucial US software and chipmaking equipment. Companies now require licences to export such products to SMIC.

On Saturday, SMIC said that it was continuing to engage with the US Department of Commerce. The company reiterated that it “has no relationship with the Chinese military, and does not manufacture for any military end-users or end-uses.” SMIC, a “national champion” that is crucial to the government’s hopes of achieving chip self-sufficiency, became the country’s biggest initial public offering for a decade when it raised $7.6bn in Shanghai earlier this year. SMIC has already been hit by the US’s tightening of sanctions on Huawei. This meant that SMIC could no longer serve its largest customer.

The chipmaker had warned of the risk of a worsening of US sanctions in its IPO prospectus. Recommended Gideon Rachman Beware the long arms of American and Chinese law The sanctions will also affect Qualcomm, the US chip designer which uses SMIC to fabricate some of its chips. Analysts believe that Qualcomm is SMIC’s second-largest customer after Huawei. On Saturday, SMIC said the company was not yet aware of the new sanctions, and was looking into the situation.

Beijing’s Ministry of Foreign Affairs has previously declared its opposition to US sanctions on Chinese companies. Last weekend, China’s Ministry of Commerce announced broad powers to curb the operations of foreign companies deemed “unreliable”. Lawyers are concerned that Beijing’s “unreliable entities list” could be used to punish foreign companies that carry out sanctions against Chinese companies, putting such companies in a bind between US and Chinese law. The Department of Commerce did not immediately respond to a request for comment.

 

[Chhatrapati]

Whoever had SMIC stocks in HK is F***ed

 

[Dalit]

No big deal for China. It has the capacity to overcome this blip.

 

[ILC]

Whoever had SMIC stocks in HK is F***ed

Why? Only stupid people will sell it or short sellers. SMIC now will have unlimited cash and tech talent supply from the Chinese government. What's more, everything is going into a direction that China will order a ban on the foreign chip. So Chinese companies will have to buy even if it is 45 nm, 28nm or 14nm. short term smartphones are going to be crap, unfortunately.

 

[Chhatrapati]

Why? Only stupid people will sell it or short sellers. SMIC now will have unlimited cash and tech talent supply from the Chinese government. What's more, everything is going into a direction that China will order a ban on the foreign chip. So Chinese companies will have to buy even if it is 45 nm, 28nm or 14nm. short term smartphones are going to be crap, unfortunately.

Well, you'll see their stocks taking a nose dive on Monday and those who are brave enough would still hold them, I wouldn't think average trader would keep that stock with them anymore. Better sell them off, SMIC just lost it's largest customer.

 

[8888888888888]

About time they ban foreign chips, force all those cheapskates to invest in Chinese ships.

 

[F-22Raptor]

No big deal for China. It has the capacity to overcome this blip.

Considering its practically impossible to develop chips without American technology Id say this is much more than a blip. China has spent tens of billions of dollars over the years to change that calculus and little progress has been made.

 

[Dalit]

Considering its practically impossible to develop chips without American technology Id say this is mucb more than a blip. China has spent tens of billions of dollars over the years to change that calculus and little progress has been made.

Bollocks. China has the resources to develop chips. In fact it already does.

Let's not get into this cat and mouse game because China too has dozens of options to punish the US.