The US trade restrictions of Chinese companies were expanded to around 35 entries, reports Reuter. Also China’s best foundry Semiconductor Manufacturing International Corp. (SMIC) is now among them, which was already expected given the developments of the last few weeks.
It was the fallback plan for local IT companies, especially Huawei. They wanted to use SMIC’s 14 nm technology to manufacture chips not only for smartphones, but also, above all, for network technology in order to continue to be in the 5G race. Since these predictions have since clouded over, Huawei should now plan entirely its own factories.
Without Western technology, however, chip factories cannot be operated or equipped first. With an entry on the list, suppliers are now prohibited from delivering this technology to semiconductor manufacturers and from offering corresponding services. The US Department of Defense justifies this with the fact that the suspicion and a “unacceptable risk“Exist that these could then be used for military purposes.
Effects of the trade war
Since September 15, 2020, strict rules have officially come into force that prohibit foreign companies from supplying Chinese technology carriers with equipment and logistics. Many manufacturers then largely put their cooperation with their Chinese partners on hold. Nevertheless, AMD, Intel and a few other companies have received special permits to continue selling certain goods. It is not known exactly which goods are affected. From the coming year, however, further restrictions should take effect, so that this should only remain a snapshot.
The corporations that are among the best in the world feel the greatest effects. Huawei is therefore always present in the media, without high-end chips from the TSMC factories and the Google software ecosystem, it is becoming more and more complicated for the group to play at the top of smartphones. For this reason, Huawei recently sold its daughter Honor in order to enable it to survive on its own two feet. The months and years to come will show whether this plan works.