The United States Department of Defense (DoD) is presently considering blacklisting china’s largest semiconductor company. If the Trump administration goes ahead to blacklist the Semiconductor Manufacturing International Corporation (SMIC), the chipmaker will be joining about 275 Chinese companies already added to the entity list of the Commerce Department, CNBC reports.
This development is a fallout of the trade war between the United States and China, effectively banning US tech companies from selling certain technologies to Chinese companies which can be used to manufacture tech products. A spokesperson for the DoD said banning SMIC from doing business with the US will mean that the Chinese company will need to secure special approval or license before it could buy or sell merchandise to US companies.
“DoD is currently working with the interagency in assessing available information to determine if SMIC’s actions warrant adding them to the Department of Commerce’s Entity List,” the DoD spokesperson said. “Such an action would ensure that all exports to SMIC would undergo a more comprehensive review.”
While the situation may escalate the tension between the US and China, the Trump administration is also pressuring other countries to impose restrictions on Chinese companies who may be used to carry out espionage for China. The US government had accused Huawei of spying for the Chinese government and banned the Chinese company from doing business with US companies, but Huawei denied the allegation and insists it does not spy for China.
The problem however is that while the Commerce Department has banned numerous Chinese companies from doing business with the US, the movie is also affecting US companies as well. It also means that the United States will not be able to sell technologies for manufacturing processors to Chinese companies who will in turn sell the microchips back to the US. Since the government cracked down on Huawei, the company has found it difficult to manufacture chips from US technologies.
Just a couple weeks ago, the Trump administration invoked an administrative order asking ByteDance, the Chinese company which owns the mobile video app TikTok, to sell off its US division to US companies or risk getting banned in the country. TikTok is currently in talks with several US companies who have indicated interest to buy its US operations as a result of President Trump’s executive order.