China Markets

Trump Administration Sanctions China’s Top Chipmaker In Possible ‘Tipping Point’

Earlier this month, shares of Semiconductor Manufacturing International, China's top chipmaker, plunged on reports the Trump administration may blacklist the company as part of The White House’s constantly escalating tech war with Beijing. Fast forward three weeks and those sanctions are a reality. According to a letter from the Commerce department sent to companies that do business with SMIC, exports to the chipmaker represent an "unacceptable risk". Specifically, the Trump administration cites the potential for "military end use", again conjuring the PLA as a threat that's not just pervasive, but almost omnipresent. The Financial Times, which broke the news on Saturday, notes that "SMIC has already been hit by the tightening of US sanctions". The reference is to Trump’s draconian crackdown on Huawei, which faced an existential crisis after the administration moved to close loopholes embedded in previous actions against the company. SMIC is among Huawei’s manufacturers. When reports of the forthcoming sanctions tanked the shares (red in the figure above), SMIC said it was in a state of “complete shock” at the prospect of being added to Wilbur Ross’s entity list,
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5 comments on “Trump Administration Sanctions China’s Top Chipmaker In Possible ‘Tipping Point’

  1. Mr. Lucky says:

    Someone needs to slap this guy up side of the head to get him to slow his roll and get a glimpse at the long-run consequences of some kind of ongoing war with the Chinese. Yesterday he started talking about banning international students in US colleges. Such a ban would eliminate at least half of America’s new engineers, doctors, and tech entrepreneurs. This man is beyond …

    • Michael Schratter says:

      Too far, too quick.

      And A full blown narcissistic personality disorder pandering here before the election to it’s confused base. Agreed.

      That said, the decades of technology copyright infringement China has been getting away with had to stop at some point, right?

  2. This ongoing slow roll is theater to distract and control the airwaves. He has found a never ending source of activity and this keeps what is left of his supporters entertained as he bullies.

  3. WPG says:

    Headline graphic is perfect – PRC flag and The President’s red tie. Nicely done.

  4. WPG says:

    “legitimate national security concerns around Xi’s global tech ambitions, the incessant badgering — the constant provocations — the never-ending escalations — are exhausting, both for market participants and for the international community, including and especially America’s allies”.
    Sounds like you have a strong opinion about what should happen, Prof. H.
    Care to share?

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