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© SMIC Business | September 07, 2020

SMIC responds to reports about a potential blacklist situation

Chinese semiconductor foundry, Semiconductor Manufacturing International Corporation (SMIC), found itself in eye of the storm following reports of a potential U.S. ban, much like the one experienced by Huawei.

On Friday, Reuters reported that the U.S. Department of Defense was considering to block U.S-based companies from dealing with the Chinese semiconductor company, citing an official from the department. SMIC’s initial response to the reports came on Saturday, in which the company said it was “in complete shock” over the news but that it is “open to sincere and transparent communication with the U.S. Government agencies in hope of resolving potential misunderstandings.” In the statement from the Chinese company, SMIC declares that it is strictly complying with the laws and regulations of all jurisdictions where it performs its businesses and that it, since its inception, has maintained long-term strategic partnerships with multiple U.S.-based semiconductor equipment suppliers. The company also points to the fact that over the years, the Bureau of Industry and Security (BIS) has granted numerous export licenses for the SMIC and also says that it solely provides services for civilian and commercial end-users and end-uses; stressing that the company has “no relationship with the Chinese military.” This is not the first time the Trump administration has used the entity list – which, as pointed out by Reuters, now includes more than 275 China-based firms – to hit key Chinese industries. The addition of Huawei and its affiliates have been well documented as has the effects on the company’s international business. For SMIC, facing a potential trade ban with U.S. companies would most definitely put a dent in its attempts to rival TSMC. However, as reported by Reuters, the company has just recently introduced capacity for production at the 14 nm process node; meaning that its about two generations behind TSMC. SMIC, just like many other fabs, rely of a number of U.S. companies for production equipment; think Applied Materials and Lam Research. The U.S. investigation is reportedly regarding alleged ties between SMIC and the People’s Liberation Army in China, Reuters reports, something that the company denies having.
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September 18 2020 12:10 pm V18.10.12-1