Punishing SMIC, Mr. Trump poured cold water on China’s chip ambitions

Tram Ho

The top Chinese chipmaker has just had a tough week, and now things are getting worse and worse.

Last Friday the US government imposed a series of new restrictions on SMIC as the US government continued to increase pressure on Chinese companies in the final weeks of its term.

With the new restrictions, dozens of Chinese companies, including SMIC and drone maker DJI, are placed on the Entity List and have no access to US supplies and technology.

Trừng phạt SMIC, ông Trump dội thêm gáo nước lạnh vào tham vọng chip của Trung Quốc - Ảnh 1.

This move could create serious problems for SMIC, as the majority of chipmakers globally are relying on US software, machinery and equipment to design and manufacture. guide. Prior to that, China’s top smartphone and telecommunications equipment maker, Huawei, struggled with its growth and sales slowdown after being included in the Entity List last year.

A statement from the US Department of Commerce states: “Products specific to semiconductor manufacturing in high-end technology – 10nm or less – will be the target of blocking key technologies such as thus supports China’s military-civilian efforts . ”

Not only that, but SMIC is also facing other troubles. Chinese media reported that earlier this week, SMIC’s co-CEO, Liang Mong Song, resigned. Surprisingly, the company itself said it is looking to confirm these reports. Even so, they also know that Mr. Liang ” wants to resign under certain conditions .”

After the announcement of new restrictions by the US Department of Commerce, SMIC shares fell 5% on the Hong Kong Stock Exchange. In all, SMIC shares have slumped about 10% in the past week – the worst level since September – when media reports revealed the possibility of the US government imposing restrictive measures. with SMIC.

Trừng phạt SMIC, ông Trump dội thêm gáo nước lạnh vào tham vọng chip của Trung Quốc - Ảnh 2.

SMIC plays an important role in reinforcing China’s technology ambitions. Much of China’s supply of chipsets comes from foreign companies, and these components play an important role in every product from China, from smartphones, computers to telecommunications equipment. Last year, the company imported chips worth about 306 billion USD, accounting for 15% of the country’s total import value.

Earlier this year, SMIC announced that it wanted to invest in technology to catch up with competitors. But SMIC is still 3 years behind in terms of technology compared to the world’s leading companies like Intel, Samsung and TSMC. Therefore, analysts believe that SMIC still has a long way to go if it wants to become a global competitor.

Refer to CNN

Share the news now

Source : Genk