US sets export restrictions on China's biggest chipmaker SMIC, saying exports to SMIC posed an “unacceptable risk” of being diverted to “military end use”
Move against SMIC further hurts chip sector after penalties on Huawei — The US government …
Financial Times
Context & Ripple Effects
This move was telegraphed: reports days earlier said Washington was weighing Entity List designation for SMIC, which would block US companies from selling it technology without a license, and SMIC shares fell more than 20% on that consideration alone. Formalizing the restrictions converts market fear into policy — and the arc did not stop there, with the Pentagon later adding SMIC to its blacklist of alleged Chinese military companies and dozens more Chinese firms swept in alongside it (DOD designation, ~80-company trade blacklist).
SMIC is the second pillar of the campaign after Huawei: the restrictions extend the same military-end-use logic from a phone maker to the foundry that fabricates chips, hitting the chip sector twice. The related coverage shows Beijing already responding along two tracks — retrofitting older ASML DUV lithography tools and quietly requiring chipmakers to source at least half of new capacity's equipment domestically.
First-order effects
US tool and materials suppliers now need licenses to sell to SMIC, and SMIC — whose shares had already dropped 20%+ when the restriction was first floated — must qualify any American inputs as non-divertible to military end use.
Second-order effects
China accelerates workarounds visible in the coverage: retrofitting older ASML DUV lithography machines for advanced production, while an undocumented rule pushes chipmakers expanding capacity toward at least 50% domestically made equipment.
Third-order effects
If the pattern holds — restrictions, then DOD blacklisting, then broader list sweeps — the chip supply chain bifurcates by nationality of equipment and fab, with Beijing's state-backed venture funds channeling capital into domestic hard-tech substitutes.
The trend: US export controls are escalating from targeted companies like Huawei and SMIC toward a structural decoupling of the semiconductor supply chain, with China responding through equipment substitution and state-funded self-sufficiency.
Just hearing SMIC has been declared a “military end user” by the American Department of Commerce. If true it's a gigantic next step into the chip wars proper by America. SMIC is China's best (only) hope of domestic logic chip production, and this cuts it off from vital US tools
Maybe the first hint that Cadence's, $CDNS, Chinese revenues, about 10% of their total, are truly at risk, from @FT: China's biggest chipmaker hit by US sanctions https://www.ft.com/...
The U.S. has banned Huawei, TikTok, Tencent & SMIC in some form. Also Chinese foreign student enrollment is in decline. Reasonable to expect retaliation against U.S. companies in the coming months. If you invest in tech, time to rebalance your portfolio. https://www.ft.com/...
“In the worst-case scenario, SMIC is completely cut off, which would severely set back China's ability to produce chips. This would be tipping point for US-China relations”. @pstAsiatech on US move to cut off China's most important semiconductor manufacturer from US technology. h…
Not a huge surprise, but nonetheless another meaningful escalation in US-China tech war SMIC is by some measures China's leading chip co. & key to indigenous production aims U.S. Government Sanctions Chinese Chipmaker SMIC, FT Reports https://www.bloomberg.com/... @QuickTake http…
New rules are being used to cut China's biggest chipmaker off from suppliers. There had long been rumours of sanctions for SMIC: now we've seen the private letter sent by @CommerceGov to suppliers. Scoop @ft https://www.ft.com/...
China is being cut off from the world technology supply chain. I suspect we'll see a larger narrative as to why - mainly to do with the national security of NATO countries. https://www.ft.com/...
“It all depends on how the US implements this. In the worst-case scenario, SMIC is completely cut off, which would severely set back China's ability to produce chips. This would be a tipping point for US-China relations,” said Paul Triolo of Eurasia Group. https://www.ft.com/...
The U.S.-China chip wars continue: U.S. just declared SMIC, China's largest semiconductor maker, a military end-user. Firms will now have to get licenses to ship U.S. tech to SMIC in a potential major blow to China's chip ambitions https://www.wsj.com/... @DanStrumpf @asafitch
And the bear trap closes. This is a crude but effective continuation of the US's tech leverage campaign against China. Without SMIC, China can no longer be a part of the global silicon R&D chain. https://www.ft.com/...
The Commerce Department has told U.S. computer-chip companies that they must obtain licenses before exporting certain technology to China's largest manufacturer of semiconductors https://www.wsj.com/...
US sanctions #China's biggest chipmaker SMIC, says @FT. Move further cuts off telecoms giant @Huawei from chip supply. @CommerceGov told companies that exports to SMIC posed an “unacceptable risk” of being diverted for “military end use”, paper says.https://www.ft.com/...