US Push for More Sanctions Leads to Plunge in Shares for Chinese Chipmaker SMIC, Huawei Mate 60 Pro Affected

# US Lawmakers Call for Export Ban on China’s Largest Chipmaker SMIC

Shares in SMIC, China’s largest contract chipmaker, experienced a sharp drop on Thursday, following a call from two US congressmen for the White House to further restrict export sales to the company. The call for action comes after the recent unveiling of the Mate 60 Pro, a new Chinese smartphone from Huawei Technologies, powered by an advanced chip believed to have been manufactured by SMIC.

The launch of this advanced chip, made by Shanghai-based SMIC, surprised industry experts. It raised questions about how SMIC was able to produce such a chip, given the United States’ stringent efforts to limit China’s access to foreign chip technology.

# China’s Big Tech Breakthrough

TechInsights, a Canadian research organization specializing in semiconductors, soon revealed that the new smartphone contained a 5G Kirin 9000s processor developed specifically for Huawei by SMIC. Analysts from Jefferies termed this a “major tech breakthrough for China.” This development has raised concerns that the ongoing US-China tech war may escalate.

US Representative Mike Gallagher, chair of the US House of Representatives committee on China, urged the US Commerce Department to cease all technology exports to Huawei and SMIC. Gallagher claimed that SMIC may have violated US sanctions, as the production of this chip would likely require US technology.

# Impact on Stock Market

In response to Gallagher’s comments, shares in SMIC, also known as the Semiconductor Manufacturing International Corporation, dipped by 8.3% in Shanghai and 7.6% in Hong Kong. Shares in Hua Hong Semiconductor, China’s second largest chip foundry, also fell by 5.8%.

Texas Republican Michael McCaul, chair of the House Foreign Affairs Committee, expressed his concern about China attempting to gain a monopoly in the manufacturing of less-advanced computer chips.

# Chinese State Media Response

Chinese state media celebrated the development as a sign that the country had effectively “broken US sanctions” and achieved technological independence in advanced chipmaking. Meme makers on the Chinese internet even declared US Commerce Secretary Gina Raimondo the unofficial brand ambassador for the Mate 60 series.

Huawei was blacklisted by the US Commerce Department in May 2019 over national security concerns, and SMIC was added to the same list in 2020. According to Jefferies analysts, China’s breakthrough in semiconductor tech could spark more debate in the US about the effectiveness of sanctions. They expect the Biden administration to tighten the chip ban on China, further limiting China’s access to advanced US semiconductors, and predict that the US-China tech war is likely to escalate.

Original Story at www.cnn.com – 2023-09-07 08:25:00