October 20, 2020


United States Restricts Exporting With China’s SMIC

USA has executed boundaries on SMIC (which is a chipmaker company by China) exports. It has been concluded that the equipment carries a huge risk for military uses.
SMIC’s suppliers will now have to apply for individual export licenses, rendering to a letter from the Department of Commerce.

This move has marked a shift in the policy of the United States before the applicants were seeking licenses to sell to china’s SMIC which was not required earlier.

The company has said that no official notices were received telling about the restrictions. Plus, the company has no connections with the Chinese military.

SMIC has reiterated constantly that semiconductors are produced and the company makes available services that are solely limited for civilians and commercial end-users. Also, it has denied that it does not create semiconductors for any military end-users.

 

As the country feels that SMIC could be a threat to national security or the country’s foreign policy.

A lawyer from Washington has stated that due to the president’s administration actions concerning TikTok, a ripple effect can be created through global supply chains. He also said that the actions taken by the president can cause China’s capital to retaliate for all the troubles.

Recently the US has banned china’s TikTok which was cited to disturb the country’s security.
Therefore, SMIC is facing some troubles regarding getting approval for the license to export.
Also, it is in the discussion of whether to blacklist china’s SMIC for showing some connections to the military of China.

Further, some US businesses are going to get an export license to ship the chips to SMIC.

It is not known which business will get the letter regarding the export but as soon as the department of commerce arrives at the conclusion that there is a presence of risk of military use, the companies will be informed about it immediately.

The bureau of the department of commerce of Industry and Security has declined on 26th September to give their opinions regarding SMIC. However, they are going to repetitively monitor and evaluate any possible threats to the United States’ national security and foreign policy interests.

The management is focusing on the activities of Chinese organizations which encourages the country’s military. The previous month, the United States of America has debarred around twenty-four Chinese corporations and it also targeted people who said were a part of construction and military actions in the sea of South China.