IT Pro is supported by its audience. When you purchase through links on our site, we may earn an affiliate commission. Learn more

Huawei chip supplier SMIC hit by US restrictions

The Trump administration’s decision marks the latest development in the rocky US-China trade relations

The US Commerce Department has imposed restrictions on exports to China’s biggest chip maker Semiconductor Manufacturing International Corp (SMIC), citing risks of military use.

SMIC is a supplier of semiconductors for Chinese companies such as Huawei, as well as US-based Qualcomm. In order to provide the chips, SMIC sources equipment from US manufacturers, such as California-based Applied Materials.

According to a letter from the US Commerce Department, seen by Reuters, SMIC’s suppliers will now have to apply for individual licenses in order to continue exporting their equipment to the company.

SMIC denies it has ties with the Chinese military and said that it had not received any official notice of the restrictions from the US departments.

However, the news has caused SMIC’s share prices to fall as much as 7.9% to HK$17.12 (£1.72). According to Reuters, this is the lowest since 29 May, when shares were down 6.7%.

The Trump administration’s decision marks the latest development in the rocky US-China trade relations and is expected to directly impact Huawei. Last month it was reported that the company was running out of its own high-end chips for smartphones due to the US sanctions which were imposed earlier this year.

On 10 August, Huawei confirmed that it would be halting production of its most advanced smartphone chips, Kirin 9000, on 15 September. Starting from this date, the AP reported, Taiwan Semiconductor Manufacturing Co. (TSMC), which has been making Kirin 9000 chips using US equipment, was banned from manufacturing chips on behalf of Huawei's HiSilicon subsidiary.

At the time, CEO of Huawei’s consumer business unit Richard Yu said that “this year may be the last generation of Huawei Kirin high-end chips”.

A week later, the Commerce Department announced that it would be expanding restrictions aimed at preventing Huawei from obtaining semiconductors without a special license, including foreign-made chips manufactured using US software or technology. Sources said that the Trump administration was also planning to add 38 Huawei affiliates in 21 countries to the growing list of companies on the government’s economic restrictions.

Featured Resources

Accelerating AI modernisation with data infrastructure

Generate business value from your AI initiatives

Free Download

Recommendations for managing AI risks

Integrate your external AI tool findings into your broader security programs

Free Download

Modernise your legacy databases in the cloud

An introduction to cloud databases

Free Download

Powering through to innovation

IT agility drive digital transformation

Free Download

Most Popular

Former Uber security chief to face fraud charges over hack coverup
data breaches

Former Uber security chief to face fraud charges over hack coverup

29 Jun 2022
Macmillan Publishers hit by apparent cyber attack as systems are forced offline
Security

Macmillan Publishers hit by apparent cyber attack as systems are forced offline

30 Jun 2022
FCC commissioner urges Apple and Google to remove TikTok from app stores
data protection

FCC commissioner urges Apple and Google to remove TikTok from app stores

29 Jun 2022