Trade War Puts Chinese Tech Companies Into Red

Issue 35

09.07.20 - Shares in Chinese chipmaker SMIC fell nearly 23% on the Hong Kong Stock Exchange this week due to fears that SMIC could become the next casualty of an ongoing war between the United States and China over technology and trade.  

The US Department of Defense (DoD) has reportedly been considering a ban on exports to SMIC - Which would add them to a whole list of different Chinese companies that are considered to be undermining American interests within the country. One of the topics under scrutiny regarding SMIC is its relationship to the Chinese military. The plummet in SMIC’s stock took off $4 billion in its overall market value. S

Companies on this list of threats to American interest are facing significant obstacles in obtaining important technology due to American companies being banned from selling to them without first obtaining a license to do so. The US also recently escalated restrictions on Chinese tech firm Huawei, which was added to the list last year.

The Department of Defense declined to comment on the reports. SMIC released a statement recently stating that it was "in complete shock".  The statement, which SMIC filed to the Hong Kong Stock Exchange, went on to read that they, "manufacture semiconductors and provide services solely for civilian and commercial end-users and end-uses. We have no relationship with the Chinese military."

Source: BBC