Chip group to warn Trump administration against blacklisting China's SMIC
Companies involved in the chip sector are planning to warn the administration of US President Donald Trump against a proposal to blacklist China's top chipmaker, Semiconductor Manufacturing International Corp (SMIC).
The companies, which are represented by the semiconductor and electronics manufacturing suppliers industry group SEMI, have argued that the move by the Trump administration would be "detrimental" to US industry.
Their warning came in a drafted letter seen by Reuters that could be sent as soon as this week to US Commerce Department Secretary Wilbur Ross.
They asserted that blacklisting SMIC would put at risk the US’ technological edge by making it more difficult for American companies to supply the company, which accounts for US$5 billion (S$6.8 billion) in annual US origin equipment and material sales.
Such a move would "contribute to a growing perception" that the delivery of US goods is "unreliable" and badly affect US market share worldwide, said the group, which has 2,400 members worldwide, including SMIC and US chip equipment makers Lam Research Corp and Applied Materials Inc.
"We urge the Department to carefully consider the immediate and long-term detrimental impacts to US industry, economic and national security that may result from the addition of SMIC to the Entity List."
Meanwhile, Joe Pasetti, SEMI's vice president of global public policy, said, "We don't comment on draft letters leaked to the press."
Earlier this month, Reuters reported that the US Defense Department along with other agencies were working to determine whether to include SMIC in the Commerce Department's "entity list," which would require US suppliers to seek difficult-to-obtain licenses before shipping to the company.
Following the news, shares of the company fell by almost a quarter
Sources have told Reuters that SMIC's relationship to the Chinese military is being scrutinized as the Trump administration increasingly trains its focus on China's military muscle.
Washington has often used the entity list to target key Chinese industries, from telecoms equipment giants Huawei Technologies [HWT.UL] and ZTE (000063.SZ), to surveillance camera maker Hikvision (002415.SZ).
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