US puts extra sanctions on Chinese chip manufacturer SMIC

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The United States has added dozens of companies to the list of those that may be cooperating with the Chinese army. Such companies must meet strict conditions in order to trade with the US.

According to the US Department of Commerce, the sanctions are the result of Beijing’s attempts to use consumer technology for military purposes, Reuters writes. There would also be evidence that SMIC has cooperated with Chinese military industrial companies. The ministry says it does not want US technology to contribute to the development of the Chinese military.

Other companies on the list

Other companies added to the list are drone manufacturer DJI, AGCU Scientech, China National Scientific Instruments and Materials and Kuang-Chi Group. The companies are said to have committed ‘wide-scale human rights abuses’.

More bark than bite

Not everyone is convinced that the sanctions are much more than symbolic. In general, companies on the list must meet strict conditions to be allowed to obtain goods from US suppliers. With SMIC, this will only be the case for equipment manufactured on a 10nm or smaller process node. The US Department of Economic Affairs indicates that other items are reviewed individually. Therefore, various people within the US government have cast their doubt on how much difference the sanctions are going to make in practice.

Sanctions against SMIC

The United States has been working on sanctions against the SMIC for some time. Back in September, the US announced the first restrictions on export to the Chinese chip manufacturer. Rumours later also started that SMIC would be added to the list of Chinese companies associated with the Chinese army. SMIC manufactures chips for Qualcomm, Broadcom and Texas Instruments, among others. The future US President Joe Biden has announced in an interview that he does not intend to ease the trade war with China immediately after his inauguration.

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