The Trump administration has put SMIC - the largest semiconductor manufacturer - on the list for trade restrictions.
Semiconductor Manufacturing International Corporation (SMIC)
The so-called entity list of the USA is 35 entries richer, the Reuters news agency reports after viewing relevant documents. SMIC, or Semiconductor Manufacturing International Corporation, is new to the black list.
SMIC is the largest local foundry in China, which has been effectively paralyzed. All semiconductor manufacturers rely on US companies like Applied Materials and Lam Research, especially for modern nodes. Without these suppliers, manufacturers like SMIC can hardly equip or operate their fabs.
These can be partially replaced, but not on a large scale - because components from European and Japanese partners are rare.
The background to the export restrictions and thus a trade embargo is the allegation that SMIC is connected to the Chinese military and is supposed to manufacture microprocessors for them.
The foundry works with the state-owned CETC (China Electronics Technology Group Corporation) and would also indirectly support armaments projects. In a statement, SMIC said: "We have no connection to the Chinese military," it only produces chips for the commercial and civilian market.
One of SMIC's customers under the US regulations for TSMC is Huawei, whose Hisilicon department has some mid-range SoCs produced there using the 14 nm process.
Huawei recently sold the Honor subsidiary, which was taken over by a newly founded company called Shenzhen Zhixin New Information Technology. It is a consortium of partners and local government-backed companies - including Shenzhen Expressway, Suning, the country's largest electronics chain, and the Alibaba Group.
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