U.S. Government Sanctions Chinese Chipmaker SMIC, FT Reports

(Bloomberg) — The U.S. imposed sanctions on Semiconductor Manufacturing International Corp., the Financial Times reported, amid escalating tensions with China over intellectual property and national security.

Exports to China’s largest chipmaker pose an “unacceptable risk” of being diverted to “military-end use,” the London-based newspaper said Saturday, citing a U.S. Department of Commerce letter to the company. Firms will need licenses in order to export technology products to SMIC, the paper said.


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SMIC has not received an official notice of the sanctions, the company said in an emailed statement. The Shanghai-based firm added that it has no relationship with the Chinese armed forces and does not manufacture for any military end-users or end-uses.

The move follows the U.S. ban on Huawei Technologies Co. last year, which prevented the company from buying American tech, including chips. SMIC’s customers include U.S. chipmakers Qualcomm Inc. and Broadcom Inc., according to Bloomberg data.

SMIC shares slumped 23% in one day earlier this month following a report that the U.S. was mulling adding the firm to a blacklist.

(Updates to add details, SMIC statement)

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