The Trump Administration was barring US companies from supplying goods and services to SMIC (Semiconductor Manufacturing International Corp)

The Trump Administration was considering barring US companies from supplying goods and services to SMIC (Semiconductor Manufacturing International Corp), China’s biggest chipmaker.
Proposed US export curbs on SMIC threaten to violate China’s nascent but growing nationally semiconductor supply chain, and hit Japanese and American companies who rely the Chinese chipmaker as an important customer.


The Trump Administration was considering barring US companies from providing goods and services to SMIC (Semiconductor Manufacturing International Corp), China’s biggest chipmaker.
The White House is considering incorporating Semiconductor Manufacturing International Corp. (SMIC) to the Commerce Department’s so-called Entity List, a blacklist of companies which U.S. suppliers require special permission to work with.


“The Company is in full shock and perplexity to the news. Nevertheless, SMIC is open to sincere and transparent communication with the U.S. Government agencies in hope of resolving possible misunderstandings,” SMIC said in a statement Saturday.
About Monday, SMIC’s share price plunged to HK$20.15 ($2.6) from HK$23.55 on Friday, doubling around $4 billion off its valuation. On Wednesday, SMIC’s price has dropped more than 9.4 percent compared to Monday to HK$18.28 as of press time. Its cost on the Shanghai Stock Exchange was down by more than 11 percent compared to the beginning of the week, falling to 54.11 yuan ($7.9) per share.

SMIC stocks dropped more than 22 percent on Monday before regaining only slightly, by 3 percent, yesterday.
The projected curbs come in a time when SMIC had been anticipated to more than double its spending this season to produce higher-end chips, helped by US$6.6 billion (RM27.5 billion) in capital from a secondary share record in July and support from state companies.
Since beginning a trade war with China at 2018, the Trump government has wielded U.S. dominance in semiconductors as one of its strongest weapons. The dreaded blacklist was set up with devastating effect against Huawei Technologies, which the U.S. has managed to isolate from the advanced computer chip suppliers.
SMIC, mainland China’s largest contract chip maker with $3 billion in earnings this past year, is an obvious next goal.

Semiconductor Manufacturing International Corp (SMIC) Chinese Communist Party military background, the United States Trump administration considered to blacklist( Commerce Department entity list) SMIC


Founded in 2000, SMIC is Beijing’s answer to the Taiwan-based Taiwan Semiconductor Manufacturing Co. (TSMC)–the world’s largest contract chipmaker and leader of the”pure play foundry” business design. A pure play foundry focuses solely on manufacturing, rather than designing and selling its own-brand generic chipsets.
SMIC follows the same business model as TSMC and, in fact, has previously imitated TSMC much too tightly. The Shanghai company’s founder, Richard Chang, is a former TSMC executive. He left TSMC in 2000 to begin SMIC, with backing from the Chinese government. TSMC resisted the brand new enterprise for theft of trade secrets and patent infringement three decades after. SMIC settled for $175 million in 2005 but violated the settlement provisions and was sued again in 2006 in a California courtroom, settling once more in 2009.
President Donald Trump talked of a”decoupling” of the US and Chinese economies on Monday.
Provide shockwaves
The proposed US curbs on SMIC could deal a setback to fabricating machines suppliers, like American companies Applied Materials, Lam Research and KLA, and Japan’s Tokyo Electron.


Aside from denting their current sales and support industry, they can rob them of their opportunities posed by SMIC’s expansion plans.
Nevertheless this is not likely to benefit rival chip gear providers in China as nobody may fill the shoes of the advanced foreign players, analysts say.
However some Chinese suppliers were making advances. The likes of Naura Technology Group Co Ltd and Advanced Micro-Fabrication Equipment Inc (AMEC), by way of instance, were expected to develop into large equipment providers to SMIC in years to come, but that prospective may currently be under threat.

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