U.S. mulls ban on SMIC, China's largest chipmaker

U.S. mulls ban on SMIC, China's largest chipmaker

According to the USA government, the companies in question pose security risks to users due to their proximity to the Chinese government, which U.S. intelligence alleges can force the firms to turn over user data or use them to spy on users in other ways.

The top Chinese manufacturer of semiconductors is denying a connection to the Chinese military amid reports the US may slap it with export controls.

United States regulators are considering adding Semiconductor Manufacturing International Corp. Imposing export restrictions on SMIC will affect USA companies that sell chip-making technology to Chinese manufacturers.

"We have no relationship with the Chinese military", the company said in its official WeChat account, "Any assumptions of the Company's ties with the Chinese military are untrue statements and false accusations".

"The Department of Defense is now working between agencies to evaluate the information available to determine whether SMIC's action should be added to the Department's list of legal entities".

The company said it is "open to honest and transparent communication" with Washington to resolve "potential misunderstandings".

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Prime Minister Scott Morrison said that Australians could be some of the first in the world to receive the vaccines. Morrison has stressed Australia wants to help Pacific countries and other regional neighbours get early access.

That could dash what some view as China's best hope to develop a self-sufficient semiconductor industry via SMIC and further escalate the Sino-U.S. spat that involves trade and technology, analysts said.

The US-Chinese tariff war that erupted in 2018 was sparked in part by Washington's complaints about Beijing's technology ambitions. That comes amid tension over control of the South China Sea and other territorial disputes.

Chines tech companies on the Entity List include Huawei, ZTE and China Electronics Technology Group Corp (CETC). That threatens to cripple Huawei's business.

The Defense Department has released two lists of Chinese companies in the past few months that it claims are owned or controlled by the People's Liberation Army.

Chinese companies, including Huawei, are developing their own processor chips and other technology, but factories that produce them require United States manufacturing technology for which there are few alternatives, the Washington Post said.

SMIC said it previously was granted "validated end-user status" by the agency that would impose the export controls. This status gives Chinese companies freedom to export USA tech without securing a license for each new shipment, according to the AP.

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