U.S. adds Additional China based Companies to the Defense Blacklist, Including SMIC!

In June 2020 The Department of Defense released its initial list of companies that would be blacklisted to prevent U.S. investors from buying those firm’s securities.

The Department of Defense has recently added additional names of “Communist Chinese military companies” operating directly or indirectly in the United States to their Defense blacklist. Those companies are as follows:

• Semiconductor Manufacturing International Corp. (SMIC)
• China Construction Technology Co. Ltd. (CCTC)
• China International Engineering Consulting Corp. (CIECC)
• China National Offshore Oil Corp. (CNOOC)

The total number of blacklisted companies now include 35 companies.

Semiconductor Manufacturing International Corporation (SMIC)

SMIC, headquartered in Shanghai, China is mainland China’s largest and leading foundry by way of scale and technology coverage.  They are also the most comprehensive in semiconductor manufacturing services. SMIC provides an integrated circuit (IC) foundry and technology services on process nodes from 0.35 micron to 28 nanometers.  SMIC is considered China’s most advanced maker of computer chips.

Further restrictions on exports for Semiconductor Manufacturing International Corporation (SMIC) could deepen the technology conflict between China and the United States. Previous restrictions have had a direct impact on SMIC is that they have been prevented from purchasing key equipment from American suppliers. Statements made by SMIC in October informed shareholders that export restrictions set by the U.S. Bureau of Industry and Security could have “material adverse effects” on its production.

December 4, 2020, SMIC was made aware that their company was added to the list of Chinese military companies. SMIC’s response has been that it continues to engage constructively and openly with the U.S. government and that it has no relationship with the Chinese military and does not manufacture for military end-users. Its U.S. customers have included Qualcomm, Broadcom, and Texas Instruments.

How will this impact your supply chain?  SiliconExpert has the data and expertise to help you identify:

• The affected products depend on the SMIC fabrication site
• Impact status (Impacted/Possibly Impacted/Not Impacted)
• Cross-reference replacements for products affected

Contact SiliconExpert today for custom analysis.

For more details on this please see direct links below:

• https://www.defense.gov/Newsroom/Releases/Release/Article/2434513/dod-releases-list-of-additional-companies-in-accordance-with-section-1237-of-fy/
• https://www.smics.com/en/site/news_read/7801
• https://www.reuters.com/article/us-usa-china-military-companies/trump-administration-adds-chinas-smic-and-cnooc-to-defense-blacklist-idUSKBN28D3CR
• https://techcrunch.com/2020/11/29/the-trump-administration-will-add-smic-chinas-largest-chipmaker-to-its-defense-blacklist-report/
• https://www.cnbc.com/2020/12/01/us-blacklist-of-chinese-firms-pose-risks-for-american-investors.html

December 7, 2020, by Hala Mohamed