US squeezes China’s biggest chip-maker SMIC

US squeezes China's biggest chip-maker SMIC - BBC News

By Leo Kelion, BBC, Technology desk editor

The US Department of Commerce has written to American suppliers of China’s biggest chip manufacturer, warning them of “unprecedented risks” that their products could be used by the Chinese military.

The letter reminds the firms they must apply for licences to ship controlled items to Shanghai-based SMIC. But it does not appear that Washington has decided whether or not to add the firm to a trade blacklist. SMIC has denied any military links. And it said it had not received any formal notice of new restrictions from the US. But the latest action caused Semiconductor Manufacturing International Corporation’s shares to drop about 7% in Hong Kong trade.

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