US to impose restrictions on supplying China's top chipmaker

Suppliers to Semiconductor Manufacturing International Corporation will now need to apply for individual licences

Employees put on clean suits at Semiconductor Manufacturing International Corp. (SMIC), in Shanghai, China, on Friday, Feb. 18, 2011. Semiconductor Manufacturing International Corp., China's biggest chipmaker, said it aims to post a sales increase of as much as 20 percent this year as the company attracts orders for more advanced products. Photographer: Qilai Shen/Bloomberg
Powered by automated translation

The United States government has imposed restrictions on exports to China's biggest silicon chipmaker after concluding there is an "unacceptable risk" that equipment supplied to it could be used for military purposes.

Suppliers of certain equipment to Semiconductor Manufacturing International Corporation (SMIC) will now have to apply for individual export licenses, according to a letter from the Commerce Department dated Friday and seen by Reuters.

SMIC becomes the second leading Chinese technology company to face US trade curbs after telecoms giant Huawei Technologies, whose access to high-end chips has been curtailed by its addition to a so-called entity list.

The Pentagon said earlier this month that it was considering blacklisting SMIC, which US authorities have identified as a threat due to an alleged "fusion" of civilian and military technologies.

SMIC said in response to a request for comment it had not received any official notice of the restrictions and said it has no ties with the Chinese military.

"SMIC reiterates that it manufactures semiconductors and provides services solely for civilian and commercial end-users and end-uses," SMIC said.

"The company has no relationship with the Chinese military and does not manufacture for any military end-users or end-uses."

The Commerce Department declined on Saturday to comment specifically on SMIC, but said its Bureau of Industry and Security was "constantly monitoring and assessing any potential threats to US national security and foreign policy interests".