China slams reported US sanctions on SMIC, other Chinese firms
Published: Dec 15, 2021 08:58 PM


China's Foreign Ministry on Wednesday harshly criticized more reported US sanctions on China's biggest chipmaker and vowed to defend Chinese companies' legitimate rights and interests, as the US government is reportedly mulling more sanctions against several Chinese companies. 

Bloomberg reported on Wednesday that the Biden administration was considering imposing tougher sanctions on Semiconductor Manufacturing International Corp (SMIC), building on an effort to limit the country's access to advanced technology.

If adopted, Applied Materials Inc, KLA Corp and Lam Research Corp - key companies along the industrial chain - may find their ability to supply gear to SMIC severely limited, the report said.

SMIC, China's largest contract chipmaker, was added to a US blacklist last year that banned its access to advanced manufacturing equipment from US suppliers due to "so-called" ties to China's military.

At a press conference on Wednesday, Zhao Lijian, a spokesperson for the Chinese Foreign Ministry, said that the country is "seriously concerned" about the reported move, adding that China has always believed that scientific and technological achievements should benefit all mankind, and should not become tools to restrict the development of other countries.

Zhao described the reported move as "typical political manipulation that harms others and disadvantages itself," saying some individual US politicians have abused the concept of national security, and they have politicized, weaponized and ideologically transformed scientific and technological issues as well as economic and trade issues. 

"This violates the principles of the market economy and fair competition, and it will only threaten the security of the global industrial chain supply chain and undermine international trade rules," Zhao said.

Analysts also warned the disruption may expand to more industries since the US is reportedly ready to wield its sanctions against more Chinese technology companies in the coming days.

The US will add eight Chinese companies, including leading drone manufacturer DJI Technology Co, to an investment blacklist on Thursday, the Financial Times reported, citing two sources briefed on the plans.

The US Commerce Department is also set on Thursday to place more than two dozen Chinese companies, including some involved in biotechnology, on its Entity List, restricting exports to them by US firms, the paper said.

"We urge some people in the US to abandon their Cold War mentality and ideological prejudice, stop abusing state power, and unreasonably suppressing certain Chinese fields and enterprises… China will, as always, resolutely defend the Chinese enterprises' legitimate rights and interests," Zhao, the spokesperson, said.

In the case of SMIC, analysts said that the tougher US clampdown on the company, a representative of China's chip strength and a company that is at the forefront of China's charge to catch up with Japan, South Korea and the US in chip technology, is within expectations. 

"SMIC might also have expected such a move," Ma Jihua, a veteran industry analyst, told the Global Times on Wednesday, noting that the tougher sanctions on the Chinese chipmaker also indicate that the growing strength of China's semiconductor industry has made the US more concerned about its leadership in the industrial chain.

SMIC posted a strong financial performance last year as global chip shortages boosted demand. In the third quarter, it reported 30.7 percent year-on-year growth in revenue to a record high of $1.42 billion, though it warned about "tremendous challenges" in production and operations.

Ma said that to curb the rise of China's chip sector, the US may further stretch its long-arm jurisdiction to South Korean and Japanese firms, and prevent them from selling key components to Chinese firms, resulting in a "broken global chip industry chain."