U.S. to Blacklist Chinese Firms Including SMIC, Reuters Says

The U.S. is preparing to blacklist Semiconductor Manufacturing International Corp. and dozens of other Chinese companies, Reuters reported, citing people familiar with the matter. Shares in China’s top chipmaker slid 5.2% Friday in Hong Kong after Reuters reported outgoing President Donald Trump is set to add around 80 more companies and their affiliates to the Commerce Department’s Entity List. The majority of those are Chinese and will join the likes of Huawei Technologies Co. on a list that denies them access to U.S. technology from software to circuitry, it said.

Companies including Huawei and SMIC have been caught in the middle of worsening tensions between the world’s two largest economies, which have clashed on issues from trade to the pandemic. Trump had been widely expected to level more sanctions against China’s national champions before Joe Biden formally took office.

“If the report you mentioned is correct, it will be another example of how the U.S. is using its national power to crack down on Chinese companies,” Chinese Foreign Ministry spokesman Wang Wenbin said at a briefing in Beijing on Friday. “We urge the U.S. to stop its wrongful activities cracking down on foreign companies.”

The Shanghai-based company, a supplier to Qualcomm Inc. and Broadcom Inc., lies at the heart of Beijing’s intention to build a world-class semiconductor industry and wean itself off a reliance on American technology. Washington in turn views China’s ascendancy and its ambitions to dominate spheres of technology as a potential geopolitical threat. A blacklisting threatens to cripple its longer-term ambitions by depriving it of crucial gear.

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