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SMIC in preliminary talks with US over export restrictions

SMIC

The Chinese chip manufacturer reiterated that it has been operating in accordance with relevant laws

Chinese chipmaker, Semiconductor Manufacturing International Corp (SMIC) said that it has undertaken “preliminary exchanges” with the US Bureau of Industry and Security regarding export restrictions.

The chipmaker said that the “company is conducting assessments on the relevant impact of such export restrictions on the company’s production and operation activities,” in a statement on Sunday.

SMIC, China’s biggest chip manufacturer reiterated that it has been operating in accordance with relevant laws and regulations in all the areas where it performs its business.

The US commerce department wrote to chip companies to inform them of the “risks” and that they must obtain licence to continue supplying goods and services to the company.

News of the restrictions, caused SMIC’s shares to sink to a four-month low in Hong Kong trading last week.

Huawei, which was de facto banned by the Trump administration, has faced similar measures by the commerce department.

Last week, following the restrictions on SMIC, Kioxia the world’s second largest maker of NAND flash memory chips, said that it would put plans for Japan’s biggest initial public offering (IPO) on ice.

The company planned to list on the Tokyo Stock Exchange on 6 October, it was due to reveal pricing for its $3.2bn (£2.5bn) listing before postponing.

Sony and the Japanese memory chipmaker, are seeking approval from the US commerce department to continue supplying Huawei Technologies, Nikkei has reported.

Kioxia warned tighter US restrictions could cause memory chip oversupply and drive down market prices.

Without the US licences, Sony and Kioxia are set to lose huge earnings.

Huawei is estimated to account for about a fifth, or roughly $9.5bn, of Sony’s image sensors sales.

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