WASHINGTON (Reuters) – The United States is set to add dozens of Chinese companies, including SMIC, the country’s top chipmaker, to a trade blacklist on Friday, two people familiar with the matter told Reuters on Thursday.
The move, which was not previously reported, is seen as the latest in President Donald Trump’s attempt to reinforce China’s tough legacy. It comes weeks before Democratic presidential-election Joe Biden is set to take office on January 20.
In total, the United States hopes to add about 80 additional companies and affiliates to the so-called entity list, almost all of them Chinese.
The Commerce Department designations are expected to name some Chinese companies that Washington says have links with the Chinese military, some of which help build and militarize artificial islands in the South China Sea, as well as some alleged human rights violations Includes, sources said
The Trump administration has often used entity listings – including more than 275 China-based firms and affiliates – to hit major Chinese industries.
These include surveillance camera manufacturer Hikvision on the suppression of China’s Uighur minority, as well as telecom equipment giant Huawei Technologies Co. and 150 affiliates, and ZTE Corp.
SMIC, Semiconductor Manufacturing International Corp, has already been in the crosshairs of Washington.
In September, the Commerce Department said that the supplier of certain specialized equipment to the company applied for an export license, after concluding that there was an “unacceptable risk” that the equipment supplied to it could be used for military purposes.
SMIC, the Department of Commerce and the Chinese Embassy in Washington did not immediately respond to requests for comment.
Last month, the Department of Defense added the company to a blacklist of alleged Chinese military companies, effectively banning US investors from buying shares starting at the end of next year.
SMIC has reiterated that it has no connection with the Chinese military.
The entity listing designation would force SMIC to obtain a special license from the Department of Commerce before a US supplier could send it critical goods, a part of the bidding by the administration to block access to sophisticated US chipmaking technology.
Sources said Commerce is also hoping to add several SMIC-linked companies to the entity list.
SMIC is the largest Chinese chip maker, but surpasses industry market leader Taiwan Semiconductor Manufacturing Company. It has sought to build foundries to manufacture computer chips that can compete with TSMC.
Relations between Washington and Beijing have become increasingly contradictory over the past year as the top two economies in the world, with Beijing tackling a coronovirus outbreak, enforcing a national security law in Hong Kong and rising tensions in the South Africa Sea .
Reporting by David Sheperdason and Alexandra Elper; Additional reporting by Humera Pamuk, Mike Stone and Karen Freifeld; Writing by Humayra Pamuk; Editing by William Mallard