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Prominent US Politicians Demand Tighter SMIC Export Restrictions

Two US senators sent a letter to US Commerce Secretary Gina Raimondo complaining her department is hampering efforts to restrict exports to China chip maker SMIC.


China chipmaker SMIC
SMIC, China’s largest chipmaker, is the target of increasing concern among US lawmakers due to suspected ties to defense or surveillance technology. Photo: AFP

 

Two prominent US senators sent a letter to US Commerce Secretary Gina Raimondo complaining her department is hampering efforts to restrict exports to China’s Semiconductor Manufacturing International Corp (SMIC).

Tightening export controls “would close an important loophole and prevent the [Chinese Communist Party] and [the People’s liberation Army] from using U.S. technology to advance its military modernization programs,” the senators said in the letter, which also asked Raimondo to clarify whether she supports added restrictions.

The Trump administration placed SMIC on the US Department of Commerce’s trade blacklist in late 2020, alleging it had ties to China’s military. The listing means US companies must apply for an export license to sell chip-making equipment to SMIC.

In October 2021, the US Commerce Department released statistics showing that US companies had secured some 188 licenses to export products worth billions of dollars to SMIC between November and April of 2021, despite being on the trade blacklist, according to Reuters.

Arkansas senator Tom Cotton, who sent the letter along with Arizona senator Bill Hagerty, has a history of China-focused efforts. He was one of two senators to introduce legislation designed to reduce US reliance on China for rare earths.

In another move, Cotton and Haggerty sent a letter to the person nominated to be undersecretary of commerce, which reports to Secretary Raimondo and heads the Bureau of Industry and Security within the Commerce Department. In the letter, the senators demanded the nominee acknowledge in writing that he believes China poses a threat to the US before being confirmed in his role.

SMIC continues to invest in growth

The steady stream of bad news out of Washington does not seem to be hampering SMIC, though: In September 2021, the company announced plans to invest $8.87 billion in a new chip plant in Shanghai that can produce 100,000, 12-inch wafers each month.

Reuters, with additional editing by Neal McGrath

 

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Neal McGrath

Neal McGrath is a New York-based financial journalist. Neal started his career covering the Asia-Pacific region for the Economist Intelligence Unit, then joined Asian Business magazine. He's subsequently held a variety of editorial positions covering business, economics, finance and sustainability. Neal has lived and worked in Hong Kong, Singapore, Germany and the US.

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