The International Semiconductor Industry Association warned the US government that sanctions against SMIC could cost it “$5 billion a year”

Source: Global Times

[Li Si-kun, Global Times] The Trump administration’s increasingly fierce crackdown and restrictions on Chinese technology companies have not only posed great challenges to Chinese companies, but also become a double-edged sword, troubling many American technology companies. The US semiconductor industry could lose $5bn a year if Chinese chipmaker SMIC were included in the “physical” list, according to a warning by the International Semiconductor Industry Association, which represents the industry’s interests.

, Reuters reported Thursday, SEMI draft letters to us commerce secretary, Ross said that the U.S. semiconductor equipment and materials have a $5 billion annual revenue from smic, smic in “entity list” will increase the difficulty of the relevant enterprises to the former in the United States, will affect global market share of semiconductor companies in the United States, “we urge the Ministry of Commerce of prudent consideration, block smic might be in the industry, the immediate and long-term adverse effect on the economy and national security.” The letter could be sent to COMMERCE Secretary Rose as soon as this week, the report said.

China will account for 28 percent of the world’s chip production capacity by 2030, according to the SEMICONDUCTOR Industry Association (SIA). SIA estimates that within 10 years, advanced chip plants in the United States will cost 30 percent more to set up and operate than those in Taiwan, South Korea or Singapore, and 37 percent to 50 percent more than those in mainland China.

On September 15, a us order to upgrade chip controls on Huawei came into effect, meaning that any company in the world will henceforth have to apply for a US licence before supplying huawei with PRODUCTS using US technology. However, on the day the ban took effect, SMIC said it had applied to the US to continue supplying Huawei as required.

On April 4, Reuters reported that the US Department of Defense was working with other agencies to decide whether to add SMIC to the Commerce Department’s so-called “entity list”. The Pentagon’s reason for targeting SMIC was that it was “reviewing SMIC’s relationship with the Chinese military”.

It is worth mentioning that in addition to the SEMI represented many of the chip companies fret about trump on Chinese science and technology enterprises, Microsoft co-founder Bill Gates also said in an interview with the American bloomberg recently, not to sell to Chinese chip, means that the United States will lose a number of high-paying jobs, and hasten the Chinese chip self-sufficient.

Deutsche Welle argues that, despite all the sanctions and a certain lead, the US has failed to produce strong new companies for years. Intel, the longtime leader, is no longer as innovative as it once was. So it is entirely possible that SMIC and Huawei, the Chinese giants directly affected by the US ban, will now combine their respective expertise to develop entirely new chips.