The U.S. government has placed new export restrictions on China's most advanced maker of computer chips, citing an "unacceptable risk" that equipment sold to the country's Semiconductor Manufacturing International Corp. (SMIC) could be used for military purposes.
According to a letter Friday by the Commerce Department, American suppliers of certain technology products to SMIC will need to apply for individual licenses before they can export to the Chinese company.
The U.S. has cut off China's telecom giant Huawei from essential supplies of semiconductors since September 15. As the requirement takes effect, SMIC becomes the second leading Chinese technology company to face U.S. trade sanctions.
When asked for comment, the Chinese chipmaker told Reuters it had not received any official notice of the restrictions from Washington and said it had no ties with the Chinese military.
'No relationship' with military
Last month, after the Trump administration reportedly was considering adding SMIC to a trade blacklist, the company denied its technology was for military use. "The company manufactures semiconductors and provides services solely for civilian and commercial end-users and end-uses. We have no relationship with the Chinese military," SMIC said in a statement.
The Chinese company indicated last month that in order to avoid U.S. sanctions, it was willing to abide by the American rules and stop selling chips to Huawei.
For all of China's efforts to become a global leader in high technology, the factory of the world is yet not able to manufacture top-level contenders in one crucial area - the microchip, the nervous system that runs just about every electronic device. Last year, China imported more than $304 billion in computer chips, more than it spent on crude oil.
SMIC's best manufacturing process is believed to be able to make 14-nanometer microchips, which are several generations behind Samsung and Taiwan Semiconductor Manufacturing Co., which already makes 5-nanometer chips. Even for those less advanced chips, SMIC still heavily relies on American technology and equipment.