Semi equipment stocks fall as US considers SMIC ban

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United States company Applied Materials is the world's largest semiconductor manufacturing equipment supplier.

They said, that the department is working "to determine if SMIC's actions warrant adding them to the Department of Commerce's Entity List".

The Department of Defense is now discussing whether they should add SMIC to the list.

Washington has imposed similar curbs on access to U.S. process chips and other components for China's first global tech competitor, Huawei Technologies Ltd., one of the biggest makers of smartphones and network equipment.

China has earmarked more than $200 billion trying to get the country's chip manufacturing industry to develop faster and more advanced semiconductors, according to Triolo. According to a report from Reuters, the usa government is considering to put SMIC to the blocked entity list, which would block U.S. companies from selling any technology to SMIC without a government license. Reacting to the report, SMIC said that they are completely shocked. "Nevertheless, SMIC is open to honest and transparent communication with the US Government agencies in hope of resolving potential misunderstandings", SMIC said in a statement.

UMC, Vanguard International Semiconductor Corp (世界先進) and GlobalFoundries Inc are likely to receive orders transferred from SMIC if the Trump administration further tightened its grip on SMIC and other Chinese semiconductor companies, Jih Sun Securities Investment Consulting Co (日盛投顧) said in a research note.

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Analyst Mark Li says SMIC could go under in a few years if sanction is imposed.

This in turn could compromise China's wider technology and artificial intelligence ambitions.

In response to the widening USA crackdown, China is planning to provide broad support for so-called third-generation (3G) semiconductors in its next five-year plan to increase domestic self-sufficiency in chip manufacturing, according to people with knowledge of the matter.

It also pointed to press releases and Chinese media reports about business co-operation between SMIC and CETC, a defence electronics contractor with many affiliates already on the United States blacklist.

It said that that SMIC plays an important role in the global semiconductor supply chain, and it makes semiconductors and provides services exclusively for civilian and commercial end-users and end-uses.

The planned curbs could hit China's chip industry across the board. The report came from the Defence Department.

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