US President Donald Trump’s administration is considering whether to add China’s top chipmaker to a trade blacklist, a US Department of Defense official said on Friday, as the US escalates its crackdown on Chinese companies.
A Pentagon spokeswoman said that the department was working with other agencies to determine whether to make the move against Semiconductor Manufacturing International Corp (SMIC, 中芯), which would force US suppliers to seek a difficult-to-obtain license before shipping to the company.
SMIC and the Chinese embassy in Washington did not immediately respond to requests for comment.
Earlier this week, the Pentagon made a proposal to place SMIC on the entity list of the End User Review Committee, a panel led by the US Department of Commerce, which also includes the US departments of State and Energy and makes decisions about entity listings, a person familiar with the matter said.
It was not clear whether the other agencies supported the plan.
The Trump administration has often used the entity list — which now includes more than 275 China-based firms — to hit key Chinese industries, from telecoms equipment giants Huawei Technologies Co (華為) and ZTE Corp (中興) over sanction violations, to surveillance camera maker Hangzhou Hikvision Digital Technology Co (杭州海康威視數字技術) over suppression of China’s Uighur minority.
SMIC is the largest Chinese chip manufacturer, but is second to rival Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the industry’s market leader. It has sought to build foundries for the manufacture of computer chips that can compete with TSMC.
However, it is also facing new restrictions from the commerce department that require Huawei’s chip manufacturers to seek US licenses before producing chips for the telecoms giant, if they rely on US chipmaking technology.
SMIC is one of Huawei’s manufacturers.
US companies, including Lam Research Corp, KLA Corp and Applied Materials Inc, which supply key chipmaking equipment, could be affected by a potential entity listing, industry sources said.
While the Pentagon official did not outline the reasons for the action, SMIC’s relationship to the Chinese military is under scrutiny, another US official and two former officials briefed on the matter said.
The Trump administration has increasingly trained its focus on Chinese companies that bolster Beijing’s military.
Last month, the US blacklisted 24 Chinese companies and targeted individuals who it said were part of construction and military actions in the South China Sea, its first such sanctions against Beijing over the disputed strategic waterway.
The defense department has released two lists of Chinese companies in the past few months that it says are owned or controlled by the Chinese People’s Liberation Army. The designation gives Trump the authority to place them on an even tougher blacklist, but so far no action has been taken.
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