Chinese Chip Giant SMIC Is In A Complete Shock After US Next Trade Ban Target

SMIC Has Denied All Potential Allegations With Chinese Military Forces

SMIC Has Denied All Potential Allegations With Chinese Military Forces

The stock shares of the largest chip manufacturing company of China have sunk after the United States has revealed that the firm could become their next target for a trade ban after several other China-based companies have been completed banned inside the country by the United States government. The Chinese chip giant SMIC (Semiconductor Manufacturing International Corporation) stated in a press release that after hearing the news, they were completely perplexed and shocked after the U.S located Pentagon revealed that they had given a proposal to add the Chinese chip giant SMIC in the governmental blacklist.

United States trade war with China

If the company was added to the blacklist, the suppliers for the Chinese chip giant SCIM would require a special form of permission before they do any business and providing of products with any American-based technical firm. After acknowledging the news, the Chinese government is in complete opposition to it.

The foreign ministry of China’s spokesman has accused the United States of deliberately maltreating them and using the potential concerns and breach of national security as a repeated excuse for breaking the international trading rules. This recent move could potentially make the Chinese chip giant SMIC as the next point of focus in the trade war between China and United States, which has already endangered the continued existence of China-based tech firm Huawei along with the strained and enforced cooperation of ByteDance, the parent company that developed the famous video-sharing application TikTok’s operation of America.

Chinese chip giant SMIC has less advancement in their production items as compared with some of the other rival corporations, as the company is unable to develop small microchips and transistors. Due to this issue, the company is unable to provide cutting-edge technology for the latest smart phones. However, the Chinese chip giant SMIC is a significant provider of semiconductor transistors of China-based companies, which also includes Huawei, while also providing their facilities to the internationally based client, i.e., Qualcomm.

According to the expert analysis done, this trade ban by the United States could potentially threaten the complete existence of Chinese chip giant SMIC, which will directly influence the increasing efforts of China’s semiconductor industry, which is an important aspect in the country’s strategy regarding Made in China 2025. The trade war between both countries could compromise China’s ambitions regarding artificial intelligence and wider technological advancements.

Links with Military

A spokesman from Pentagon stated that adding Chinese chip giant SMIC into the Entity List by the Department of Commerce would ensure that all manufactured and exported goods by SMIC would undergo a comprehensive checking before they are allowed in the United States to prevent any breach of national security. No official statement has been released, but it is believed that these concerns might be due to alleged connections of SMIC with the Chinese military. But the Chinese chip giant SMIC has denied any and all allegations made against them regarding their alleged connection with the military forces of the country, stating that they only manufacture chips and transistors which are solely made to be consumed by commercial usage and civilians.

After the accusation by the United States, even though SMIC has denied all potential ties with the military, the Hong Kong shares of the company have dropped down 23%, while in Shangai, they dropped 11%. Due to this, the Chinese chip giant SMIC has suffered from a loss of $6 billion in its market value. It has been noted that the Datang Telecom Group is the top shareholders of SMIC, along with being its customer and board member. The company also provides its products to the People’s Liberation Army.

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