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US-China Trade War Latest Casualty, SMIC, Lost $4 Billion After Sanctions

Semiconductor Manufacturing International Corp (SMIC), could be the latest casualty of the US-China trade war. The Chinese chipmaker saw its shares drop by almost 23% in Hong Kong after news emerged that the US Department of Defense and other US agencies were considering banning exports to the company.

 

SMIC could be added to a list of companies that the American government says could be undermining US interests. The company’s stock saw about $4 billion wiped from its market value. The company is China’s biggest semiconductor maker, it also lost 11% share value on the Taiwanese stock exchange.

 

Under scrutiny is the company’s relationship with the Chinese military according to a report by Reuters. The report also cites an unnamed US official and two former officials briefs on the matter.

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SMIC expressed shock at the reports, denying any affiliations with the Chinese military. SMIC said in a statement to the Hong Kong Stock Exchange, “[SMIC] manufactures semiconductors and provides services solely for civilian and commercial end-users and end-uses. We have no relationship with the Chinese military”.

 

SMIC says that it is ‘open to sincere and transparent communication’ with US government agencies. It also has hope of ‘resolving potential misunderstandings.’

 

The Trump administration in May 2020 did the same with Huawei. The government restricted Huawei’s chip design company’s ability to work with the world’s biggest contract manufacturer of semiconductors, TSMC.

 

In August 2020, it further cut off Huawei’s access to other chipmaking companies. Most major semiconductor manufacturing companies, like TSMC and SMIC, depend on US machinery and technology. The Chinese government at the time said that the US was also abusing its national power and bullying its companies.

 

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Kolawole Awolope

Passionate about talking, passionate about talking tech.

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