American suppliers to China’s biggest chipmaker SMIC will require a license to sell particular equipment, according to CNBC. The U.S. explains move due to “unacceptable risk” that the equipment may be diverted for military purposes. Sanctions will threaten Beijing’s focus on becoming self-reliant in semiconductor technology.
- SMIC is a critical part of Beijing’s ambitions, and sanctions would derail the company’s development for many years.
- SMIC has “no relationship with the Chinese military and does not manufacture for any military end-users or end-uses”- SMIC
- Semiconductors are important components of the consumer electronics industry and will derail China’s economy.
- Other Chinese companies, notably, Huawei would be hurt by the sanctions.
- China must overcome attempts by the U.S. to cripple its technological development- Global Times Editorial.
U.S. sanctions saw Shanghai-listed shares for SMIC fall by over 6% while Hong Kong Shares marked the daily low at over 5%. HKEX: 981 is now down 3.88%.