WASHINGTON • Companies that supply the chip sector with sophisticated and expensive equipment plan to warn US President Donald Trump's administration against a proposal to blacklist China's top chipmaker, Semiconductor Manufacturing International Corp (SMIC), arguing that it would be "detrimental" to US industry.
The companies are represented by the semiconductor and electronics manufacturing suppliers industry group Semi, which drafted a letter seen by Reuters that could be sent as soon as this week to Commerce Secretary Wilbur Ross.
In the draft letter, the group argues that blacklisting SMIC would jeopardise the technological edge of the United States by making it harder for American firms to supply the company, which accounts for as much as US$5 billion (S$6.8 billion) in annual US origin equipment and material sales.
The group also argues that such a move would "contribute to a growing perception" that the delivery of US goods is "unreliable" and hit US market share worldwide.
"We urge the (Commerce) Department to carefully consider the immediate and long-term detrimental impacts to US industry, economic and national security that may result from the addition of SMIC to the entity list," said the group, which has 2,400 members worldwide, including SMIC and US chip equipment makers Lam Research and Applied Materials.
The Commerce Department did not immediately respond to a request for comment.
Semi's vice-president of global public policy Joe Pasetti said: "We don't comment on draft letters leaked to the press."
Reuters reported earlier this month that the Defence Department was working with other agencies to determine whether to add SMIC to the Commerce Department's "entity list", which would force American suppliers to seek hard-to-get licences before shipping to the company. Shares of the company plunged by nearly a quarter on the news.
SMIC said in a statement at the time that it was "in complete shock" over the news but was open to communication with US government agencies in hopes of resolving any misunderstandings.
While a Defence Department official did not disclose the motive for the proposed action, SMIC's relationship to the Chinese military is under scrutiny, sources told Reuters, as the Trump administration increasingly trains its focus on China's military muscle.
REUTERS
