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The Department of Defense is in discussions over whether SMIC should be added to the Commerce Department’s entity list, which essentially restricts those companies from receiving specific goods made in the U.S.
“DoD is currently working with the interagency in assessing available information to determine if SMIC’s actions warrant adding them to the Department of Commerce’s Entity List,” a Defense Department spokesperson said. “Such an action would ensure that all exports to SMIC would undergo a more comprehensive review.”
The administration’s move is part of a continued effort to put pressure on China’s technology firms and would mark a major escalation in the tech battle between the U.S. and China.
SMIC is viewed as a key player in China’s effort to boost its domestic semiconductor industry, an ambition that was accelerated by the U.S.-China trade war. Imposing export controls on SMIC would impact U.S. companies that sell chip-making technology to China manufacturers.
The U.S. entity list now includes more than 275 China-based companies, according to Reuters, which first reported that SMIC might be blacklisted.
U.S. officials recently announced it will further tighten restrictions on China’s Huawei Technologies in order to crack down on the telecommunication company’s access to commercially available chips.
The restrictions prevent Huawei from obtaining semiconductors without a special license. SMIC is one of Huawei’s manufacturers.
As tensions grow worse between the U.S. and China, U.S. officials are pushing other governments around the world to place restrictions on Huawei, arguing that the company will give data to the Chinese government for spying. Huawei has denied that it spies for China.
The Trump administration also issued executive orders last month banning transactions with ByteDance and is forcing the company to divest the U.S. operations of the popular app TikTok.
— CNBC’s Lauren Feiner contributed reporting