US Considers Extending Ban On Key Exports To China’s SMIC – Report

China’s Semiconductor Manufacturing International Corp (SMIC) is once again in the crosshairs of US officials, despite the worldwide chip shortage.

The Wall Street Journal (WSJ) reported that US officials are considering discussing a Defense Department proposal to close regulatory loopholes that have allowed SMIC to buy critical US technology.

The US is also reportedly seeking to ban American investment in Chinese artificial intelligence giant SenseTime Group.

Closing loopholes

In an effort China  to become more self-sufficient in semiconductor production and address the worldwide chip shortage, SMIC in September announced plans to build a $8.87 billion (£6.4bn) chip production plant in a joint venture with the Shanghai city government.

The factory is to specialise in more mature chip technologies using older 28-nanometre manufacturing processes and higher, with a target of producing 100,000 12-inch wafers per month.

The plans of SMIC to move into the manufacture of cutting-edge chips had been interrupted by US sanctions introduced last year that restrict its access to US technologies and suppliers.

SMIC In ‘Complete Shock’ Over US Sanctions Threat

The US blacklisted SMIC over its relationship to the Chinese military, which SMIC denies.

But the US restrictions means the chipmaker could not access to advanced manufacturing equipment from US suppliers.

Restrictions hurting

SMIC is the largest Chinese contract chip manufacturer, but is not as big as market leader Taiwan Semiconductor Manufacturing Co Ltd (TSMC).

SMIC said earlier this year on an earnings call that it hasn’t been able to fully address increased demand for chips due to the US blacklisting.

SMIC reportedly did not immediately respond to a request for comment on the report.

But it worth noting that in the coming months, US officials are also considering adding more Chinese technology companies to the Commerce Department’s entity list and to the Treasury list banning US investment, the Journal added.

And on Wednesday this week, the US House of Representatives passed legislation to ban imports from China’s Xinjiang region over concerns about forced labour.