Top Chinese chipmaker blacklisted by US government

[Pete Flint]

What just happened? In the next installment of the US trade war with China, the Department of Defence has added China's top chipmaker, SMIC, to a list of companies supposed to have ties to the Chinese military, hindering all US trading in the company's shares. This is not the first direct offensive against the firm by the US government during its current administration. The company was slated to produce 70 percent of China's silicon by 2025, but with these new restrictions, these plans may be delayed.

Back in July, we covered the rising tide of Chinese silicon manufacturing through the chipmaker, SMIC, which was founded in 2000 and is currently producing about 20 percent of China's GPUs, CPUs, and network chips, among others. The company has plans to bump this number up to a scorching 70 percent of China's chip manufacturing by the year 2025 through funding from the Chinese government and private investors.

This week, however, the US Department of Defence under the direction of the executive branch has listed SMIC, along with 3 other large industrial firms, as "Chinese military companies." Signed by the president in November, this order follows a hard-line strategy to limit Chinese military development and is part of an end-run, “tough on China” campaign, which Donald Trump’s administration intends to push through before he exits office in January.

What this means for the chipmaker is that US bodies can no longer invest in the company or trade in its stock. While the DoD’s executive decision barred trading in SMIC shares, the spotlight now lies on the Department of Commerce as to whether they will blacklist commercial trade with the company, a move that could seriously limit SMIC’s 5-year plan.

In a statement, SMIC said it has no ties to its national military. Hua Chunying, a Chinese Foreign Ministry spokeswoman, stated, “The US should stop abusing national power and national security concepts to suppress foreign companies.”

In recent years, China has put significant resources into gaining technological independence from international producers, and the national government has been one of the company’s biggest investors.

SMIC is not currently capable of producing chips on modern 5nm or 7nm nodes that are used in the latest and greatest smartphone and workstation silicon. Current estimates suggest the firm is two years behind the tide, largely due to trade restrictions imposed by the US in the past.

In 2018, SMIC apparently attempted to purchase an expensive, modern lithography machine from the only other capable producer, a company in the Netherlands, but this deal was also hindered by US bodies.

Some speculate that further separation from Chinese tech firms increases the likelihood that China will create its own competing tech industry to rival other countries leading the pack. However, others believe that, in a country where the national government is often tied into commercial firms, this “tough-on-China” strategy is important for foreign nations to limit China’s political and military power.

Either way, we will most likely be hearing about SMIC again soon.

Image credit: Geekwire

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https://www.techspot.com/news/87867-china-top-chipmaker-blacklisted-us-government-executive-order.html

 

[Endymio]

Department of Defence has added China's top chipmaker, SMIC, to a list of companies supposed to have ties to the Chinese military

"Ties"? Funded and controlled by the PRC is the more accurate statement.

Current estimates suggest the firm is two years behind the tide, largely due to trade restrictions imposed by the US in the past.

Firstly, SMIC is significantly more than two years behind TSMC. Secondly, blaming that on recent trade restrictions is ludicrous. If getting a sub-10nm process node up and running was no more than the matter of buying a litho machine or two, then Intel would have been churning out 7nm chips years ago.

 

[kimo1]

Monopoly to suppress monopoly.

 

[loki1944]

"In a statement, SMIC said it has no ties to its national military," LOL pinochio.

 

[Daniele 00]

" to limit someone political and military power. " can be considered as an act of war. I wonder if normal USA citizien realize it or not.

 

[Endymio]

" to limit someone political and military power. " can be considered as an act of war. I wonder if normal USA citizien realize it or not.

I wonder if you realize that, in theory, anything can be "considered" an act of war by someone willing to stretch the definition far enough.

However, under normally accepted international codes of conduct, refusing to trade or do business with a foreign nation is not an act of war, and has never been adjudged such by the ICC, the UN, nor any other international body.

 

[wiyosaya]

Americans are paying the Chinese Tariffs. https://www.cnbc.com/2019/06/03/us-china-trade-war-who-pays-for-donald-trumps-tariffs.html
Also, Biden has said that he will not immediately roll back the tariffs. https://www.forbes.com/sites/jackbr...lback-trump-tariffs-on-china/?sh=1f4704fb7dae

 

[Endymio]

Americans are paying the Chinese Tariffs.

That article is absolute nonsense -- I doubt you even read past the headline. The only evidence it cites that Americans are paying Chinese tariffs was a study on washing machine tariffs, which were not placed on China alone, but on all imports worldwide. The article then continues, saying:

"that analysis [that US consumers pay the cost of tariffs] has not been universally confirmed. In fact, some research indicates that Chinese exporters may be the ones paying the toll..."

The article also fails to mention that the trade deficit with China dropped a staggering 18% last year, and is predicted to drop further this year. The tariffs worked, and worked better than anyone predicted.

 

[silversea]

We do not need China, Russia, or North Korea never have never will, we need to sever all ties with them NOW! we definitely don't need the products that are made in "CHINA" and believe me we have plenty of products laying around scream made in "CHINA" don't you get tired of seeing it, I would love to see more made in USA or MADE IN AMERICA do you agree?

 

[wiyosaya]

The article also fails to mention that the trade deficit with China dropped a staggering 18% last year, and is predicted to drop further this year. The tariffs worked, and worked better than anyone predicted.

The trade deficit with China decreased??? Think again - https://www.just-style.com/news/us-trade-deficit-in-goods-rises-by-17-in-october_id140238.aspx

International Trade

www.census.gov

Sorry to disappoint you, but according to the figures through October 2020, the deficit with China is on the rise again.

 

[Endymio]

The trade deficit with China decreased??? Think again (link deleted)

Amusing: immediately after having your last claim about US consumers paying Chinese tariffs debunked, you waste no time dribbling out yet more nonsense. Did you even read the link you posted from "Just Style" magazine? It mentions a one-month increase from Sept - Oct only.

Here are actual annual figures, from the US Census Department:

2019 US-China Trade Deficit: 345,204 MILLION
2018 US-China Trade Deficit: 418,953 MILLION

Also, if you compare each month of 2020 to the matching month in 2019, you'll see that every single month this year has shown a decline. This is the only proper method for trade or sales statistic comparisons, due to cyclic fluctuations in sales throughout a year. For example, if one compares Feb 2020 not to Feb 2019 (the proper method) but to the immediately prior month (Jan 2020) you see a nearly 40% drop in just one month. Surely even you can see this isn't a valid methodology.

So far, 2020 is down about 14% from the 2019 figures, or down a colossal 29% from just two years prior. A truly astounding accomplishment.

 

[Daniele 00]

I wonder if you realize that, in theory, anything can be "considered" an act of war by someone willing to stretch the definition far enough.

However, under normally accepted international codes of conduct, refusing to trade or do business with a foreign nation is not an act of war, and has never been adjudged such by the ICC, the UN, nor any other international body.

I agree what you said about UN. The utility of UN is completly another topic, considering how much USA respect UN decisions.

I'm sure you 'r intelligent and that you know that any war, start from economy. This is my point. And about "anything can be considered an act of war", this is just nosense, by stressing definitions or not.
Wars erupts as a consequence of economy tensions, and, they do not only exist hot wars, expecially in modern era. Financial, cyber, proxy etc are other form of wars.

Also the way USA attacked China companies is unfair. Watch at 5g, huawei, tiktok as an example. If you want China to rely more on domestic production and asia market, you are doing it right. Usa exceptionalism will not last for ever after all.

 

[Daniele 00]

We do not need China, Russia, or North Korea never have never will, we need to sever all ties with them NOW! we definitely don't need the products that are made in "CHINA" and believe me we have plenty of products laying around scream made in "CHINA" don't you get tired of seeing it, I would love to see more made in USA or MADE IN AMERICA do you agree?

this is also true for the rest of the world toward Usa. Would you severe your own ties with the rest of the world ? Why not stay at home instead of messing in other countries? you shall give the example by bringing back your militaries. And by stopping to finance revolutions abroad. Let alone the lies and disinformations etc.

 

[Endymio]

About "anything can be considered an act of war", this is just nosense, by stressing definitions or not.

See casus belli. Look in the historical examples section.

Also the way USA attacked China companies is unfair.

The US didn't attack Chinese companies. China, however, has attacked many US companies via IP theft, forced IP transfer, and industrial espionage. The FBI at present has over 2,500 such cases open against China at the present time alone, and by some estimates, more than 95% of such cases go entirely unreported.

 

[Daniele 00]

See casus belli. Look in the historical examples section.

The US didn't attack Chinese companies. China, however, has attacked many US companies via IP theft, forced IP transfer, and industrial espionage. The FBI at present has over 2,500 such cases open against China at the present time alone, and by some estimates, more than 95% of such cases go entirely unreported.

there is no need to post a wiki . I believe I'm mature enough to know any war, regardless of the pretext, start from an economic reason. And I'm confident you know it too.
So US did not attack any Chinese company you said . what about copyright theft Usa companies did? Jasmine rise from thai as an example, you can research it. Financial attack on south east Asia from Soros from 80, wasnt it a financial attack that also affected China companies, other than destabilize half south asia currencies?
The points you have made about FBI cases can be true, but to state that US didnt attack Chinese companies you'r not being intellectually honest.

 

[Endymio]

So US did not attack any Chinese company you said . what about copyright theft Usa companies did? Jasmine rise from thai as an example...

Lol, wait a minute -- you're claiming that because a US firm trademarked (not "copyrighted") a strain of rice from Thailand, that this constituted a US attack on China? A strain of rice they developed themselves, by the way -- not "stole". Even among kooky Internet conspiracy theories, this one may well take the cake.

As for Soros, he is one of my least favorite individuals in the western hemisphere. But he's a private citizen; his actions are not the same as state-sponsored acts, and speculating on currency is not an attack anyway. Those who believe currency speculators can "destabilize" a currency failed Economics 101.

 

[Daniele 00]

Lol, wait a minute -- you're claiming that because a US firm trademarked (not "copyrighted") a strain of rice from Thailand, that this constituted a US attack on China? A strain of rice they developed themselves, by the way -- not "stole". Even among kooky Internet conspiracy theories, this one may well take the cake.

As for Soros, he is one of my least favorite individuals in the western hemisphere. But he's a private citizen; his actions are not the same as state-sponsored acts, and speculating on currency is not an attack anyway. Those who believe currency speculators can "destabilize" a currency failed Economics 101.

it is an example man. You have claimed something like "US did not attack any Chinese company", I answered to you with a pair of example. Im sure anybody can find out by themself all the example they wish for about your country conduct regarding attacking chinese firms.

Just a little clarification about thai Jasmine. This was indeed a theft. You can ask to any Thai person here, they will tell you the same. You are calling "cospiracy theory" a whole nation. Why? But because Thai Jasmine is a native plant that grow only in Thailand. One day a western company steal their seed, modify a little and copyright Thai Jasmine brand, and doing so prevented any Thai company to use the brand Thai Jasmine in the future. Even if if were legal according to international regulation, it is unfair n immoral to use the brand Thai jasmine, considering it is a Thai native plant.
"kooky Internet conspiracy theories" you said... I believe this discussion has reached a point in which it is better to stop it. Thank you for the conversation. /Daniele

ps: " and speculating on currency is not an attack anyway " judging from the consequences of Soros finacial speculation in that period, it was the worst attack south-east reiceved in decades, from which they are still recovering. Soros not being a USA asset you said, a "private citizien". It is an interesting and long topic (and also an off topic), but I just want to hint: the lobby system, from which your very government depends on.

 

[Endymio]

it is an example man.

But it's not a relevant example. It doesn't even involve China, nor of an action by the US government. If you believe the US is "attacking Chinese companies", give us an example or stand down.

Just a little clarification about thai Jasmine. This was indeed a non moral attack.... One day a western company steal their seed, modify a little and copyright Jasmine brand, and doing so prevented any thai company to use the brand jasmine in their future. Even if if were legal according to international regulation, it was unfair n immoral...

So many things wrong here, I don't know where to start. Ricetec didn't "steal" any seeds. They purchased them, and spent ten years and many millions of dollars to genetically modify them. Also, they didn't trademark (please stop saying "copyright"; it's the wrong term) the "brand Jasmine". They created their own brand which they called "Jasmati", and trademarked that term.

No one in Thailand, nor China is in any way, shape, or form, prevented from growing Jasmine rice and selling it, nor of calling it Jasmine rice either. So what's the problem?

 

[Daniele 00]

" If you believe the US is "attacking Chinese companies", give us an example or stand down. "
Read the title of this very topic
[SIZE=26px]Top Chinese chipmaker blacklisted by US government.
.[/SIZE]

 

[Daniele 00]

But it's not a relevant example. It doesn't even involve China, nor of an action by the US government. If you believe the US is "attacking Chinese companies", give us an example or stand down.

So many things wrong here, I don't know where to start. Ricetec didn't "steal" any seeds. They purchased them, and spent ten years and many millions of dollars to genetically modify them. Also, they didn't trademark (please stop saying "copyright"; it's the wrong term) the "brand Jasmine". They created their own brand which they called "Jasmati", and trademarked that term.

No one in Thailand, nor China is in any way, shape, or form, prevented from growing Jasmine rice and selling it, nor of calling it Jasmine rice either. So what's the problem?

I already agreed that Jasmine theft was legal according to international rules. I'll make it an example for you: A guest of yours has come to your home, you show to him your lovely plant of which you are so proud. After few days you realize your guest had engineered a seed that he rob from your plant, of course without your knowledge nor permission, he copyrighted it and resell it for a lot of profit. How who you feel ? wouldnt you feel like he cheated you?
I'm european, not Thai nor Usa, im not biased, but nobody gave Usa company permission to take Thai Jasmine name. It is unfair, legal according to internationally rules as you have shown, but an immortal theft. Here is the story, https://www.sunsonline.org/trade/process/followup/1998/04290198.htm
(" RiceTec deceives the public and uses an Asian-sounding name which connotes quality to lure people to believe they are being offered a cross between Jasmine and Basmati. " " To our knowledge, RiceTec and other US companies marketing 'their own versions' of the Thai Jasmine rice have not patented the germplasm, but are exercising their own claims to the name. This in itself is an offence. But they have also distorted the name to the direct disadvantage of Thai farmers. ")

About being the "relevant example". Your point is that "Usa never attack any chinese company". I think you also dont believe it, nor anybody with conscience does it. In a free commerce there are theft everywhere, from China, and from Usa aswell. Usa companies are no angels and I dont feel to prove you anything about it. Anyone can do his own research if they wish to find examples. Thai Jasmine story show you that Usa companies are no different from chinese ones. Afterall we are all the same race. We wont stop at anything in front of a profit, arent we? Let's try to be fair in our discussion as well.

 

[Endymio]

I'll make it an example for you: A guest of yours has come to your home, you show to him your lovely plant of which you are so proud. After few days you realize your guest had engineered a seed that he rob from your plant, of course without your knowledge nor permission, he copyrighted it and resell it

A) The plant in this case wasn't stolen, nor even "taken without permission".
B) The plant trademarked (once again, NOT copyrighted) is not the same plant, no more than you are the same person as your great-grandfather.
C) The name trademarked is not the same name being used by Thai farmers.

Regarding your link: it admits Ricetec didn't copyright the name "Jasmine", but claims -- because they used a different, but similar name, that this is somehow even worse. In fact, their statement is racist and offensive in itself, as it claims that a U.S. based firm has no right to use trademarks which "sound Asian".

In closing, your claim this is even remotely similar to Chinese military intelligence performing industrial espionage to hack into the servers of US corporations and steal trade secrets, is absurdity itself.

 

[Endymio]

" If you believe the US is "attacking Chinese companies", give us an example or stand down. "
Read the title of this very topic: Top Chinese chipmaker blacklisted by US government.

As already stated, refusing to do business with a company is not an "attack" on them, except in the most metaphorical of senses. It certainly isn't equivalent to state-sponsored industrial espionage.