U.S. blacklists China’s largest chip maker as technology tensions rise

U.S. blacklists China's largest chip maker as technology tensions rise

Integrated circuit on a circuit board. The semiconductor industry has been concentrated during the US-China trade war.

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The Trump administration is considering export restrictions for China’s largest semiconductor manufacturer, Semiconductor Manufacturing International Corporation, a Defense Ministry spokesman said.

The Department of Defense is discussing whether SMIC should be added to the Department of Commerce’s list of legal entities, which fundamentally limits the company from accepting certain goods manufactured in the United States.

“The Department of Defense is currently working between agencies to evaluate the information available to determine whether SMIC’s action should be added to the Department’s list of legal entities.” “These measures will ensure that all exports to SMIC go through a more comprehensive review.”

The administration’s move is part of an ongoing effort to put pressure on China’s tech companies and represents a huge expansion in the US-China technology battle.

SMIC is considered a key player in China. Efforts to revitalize the domestic semiconductor industry, Ambition accelerated by the US-China trade war. Export controls on SMIC will affect US companies selling chip manufacturing technology to Chinese manufacturers.

According to Reuters, the U.S. corporation list currently includes more than 275 China-based companies. Reuters first reported that SMIC could be blacklisted.

U.S. officials recently announced they will tighten regulations even further. Huawei Technologies in China to crack down on access to telecom companies’ commercial chips

Due to these restrictions, Huawei cannot acquire semiconductors without a special license. SMIC is one of Huawei’s manufacturers.

As tensions between the U.S. and China intensify, U.S. officials are pushing restrictions on Huawei to other governments around the world, arguing that the company will provide data to the Chinese government for spying. Huawei denied it was spying on China.

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The Trump administration also issued an executive order last month banning transactions with ByteDance and is forcing the company to sell its U.S. operation of the popular app TikTok.

-CNBC’s Lauren Feiner contributed to the report.

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