SMIC warns of material impact from US sanctions - Mobile World Live

SMIC warns of material impact from US sanctions

05 OCT 2020

Semiconductor Manufacturing International Corp (SMIC) confirmed some suppliers received letters from the Bureau of Industry and Security (BIS) in the US indicating they would need a licence to export equipment to the Chinese chipmaker, which acknowledged the new rules may have a material adverse effect on its production and operations.

In a statement, the company said it is conducting an assessment of the impact of the restrictions on certain equipment, accessories and raw materials exported from the US. It said it has “undertaken preliminary exchanges with the BIS” and will continue to actively facilitate communications with the relevant government departments.

Last week, the Department of Commerce imposed new trade restrictions on the company, requiring its suppliers to obtain export licences covering certain equipment.

TrendForce said in a report today US-based chip equipment suppliers, including Applied Materials, Lam Research and KLA, are expected to bear the brunt of the impact from the sanctions, while ASML in the Netherlands also will be affected.

Given SMIC’s top position in China’s foundry industry, the research company said the sanctions will likely cause considerable damage to its R&D of advanced process technologies and China’s efforts at semiconductor independence.

It also believes the impact on SMIC will be much greater compared with the effects of trade restrictions on Huawei, as non-Chinese clients will likely redirect orders to Taiwan-based foundries, Korea-based Samsung and GlobalFoundries to reduce supply chain risks.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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