The US government made good on a threat to add China’s largest chipmaker Semiconductor Manufacturing International Corp (SMIC) to a trade blacklist, imposing new rules requiring its suppliers to obtain export licences covering certain equipment, Reuters reported.

In a letter to some US tech companies, the Department of Commerce (DoC) said there was a risk components and equipment supplied to SMIC could be used for military purposes, Reuters wrote. The licensing requirement will be in place until the DoC reviews SMIC and its subsidiaries.

SMIC said it had not received an official notice from the DoC, the news agency stated. It previously denied any link to the military and called for dialogue with the US.

The new restrictions could block access to key chip manufacturing equipment, which would slow SMIC’s push to produce more advanced semiconductors to reduce the country’s reliance on imports.

Founder of research blog Radio Free Mobile, Richard Windsor said the sanctions are one step below those which require US companies to hold a licence to ship goods.

With chip manufacturing equipment controlled by only a few companies “SMIC is now in a very tight spot” because no vendor can produce silicon without using kit or software from a US company, he said. https://www.mobileworldlive.com