Sat, Dec 19, 2020 page10

• US to blacklist more firms in China, including SMIC

  ‘ENTITY LIST’: Washington is expected to add about 80 companies and affiliates, nearly all of them Chinese, to the list for their ties to the Chinese military, sources said

  • Reuters, WASHINGTON
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  The US was yesterday set to add dozens of Chinese companies, including the nation’s top chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯), to a trade blacklist, two people familiar with the matter said on Thursday.

  The move, which has not previously been reported, is seen as the latest in US President Donald Trump’s effort to cement his tough-on-China legacy. It comes just weeks before US president-elect Joe Biden is set to take office on Jan. 20.

  In total, the US is expected to add about 80 companies and affiliates to the so-called entity list, nearly all of them Chinese.

  

  A man visits a booth of Semiconductor Manufacturing International Corp at the China International Semiconductor Expo in Shanghai on Oct. 14.

  Photo: Reuters

  The designations by the US Department of Commerce are expected to name some Chinese companies that Washington says have ties to the Chinese military, including some helping it construct and militarize artificial islands in the South China Sea, as well as some involved in alleged human rights violations, the sources said.

  The Trump administration has often used the entity list — which now includes more than 275 China-based firms and affiliates — to hit key Chinese industries.

  These include telecom equipment giants Huawei Technologies Co (華為) and 150 affiliates, and ZTE Corp (中興) over sanction violations, as well as surveillance camera maker Hikvision Digital Technology Co (杭州海康威視數字技術), over suppression of China’s Uighur minority.

  SMIC has already been in Washington’s crosshairs.

  In September, the department mandated that suppliers of certain equipment to the company apply for export licenses after concluding there was an “unacceptable risk” that equipment supplied to it could be used for military purposes.

  SMIC, the department and the Chinese embassy in Washington did not immediately respond to requests for comment on Thursday.

  Last month, the US Department of Defense added the company to a blacklist of alleged Chinese military companies, effectively banning US investors from buying its shares starting late next year.

  SMIC has repeatedly said that it has no relationship with the Chinese military.

  The entity list designation would force SMIC to seek a special license from the commerce department before a US supplier could send it key goods, part of a bid by the administration to curb its access to sophisticated US chipmaking technology.

  The commerce department is also expected to add numerous SMIC-affiliated companies to the entity list, the sources said.

  SMIC is the largest Chinese chip manufacturer, but trails Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the industry’s market leader.

  It has sought to build out foundries for the manufacture of computer chips that can compete with TSMC.

  Ties between Washington and Beijing have grown increasingly antagonistic over the past year as the world’s top two economies sparred over Beijing’s handling of the COVID-19 outbreak, imposition of a National Security Law in Hong Kong and rising tensions in the South China Sea.
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