Semiconductor Manufacturing International Corporation (SMIC) saw shares plummet this week following reports that the Trump administration plans to add the company to a government Entity List.
On Monday, shares for the Chinese chipmaker collapsed 20 percent on the Hong Kong Stock Exchange and 10 percent on the Shanghai Science and Technology Innovation Board, wiping out over $5bn in value, the Financial Times reported on Monday.
— Arjun Kharpal (@ArjunKharpal) September 7, 2020
But the Chinese semiconductor company said on WeChat that it strictly follows the laws and regulations of relevant nations as it had maintained cooperative relations with global chipmaking equipment suppliers for years.
“Any assumptions of the company’s ties with the Chinese military are untrue statements and false accusations. The Company is in complete shock and perplexity to the news. Nevertheless, SMIC is open to sincere and transparent communication with the US Government agencies in hope of resolving potential misunderstandings," SMIC said in a statement.
The US Department of Defense is mulling whether to add SMIC to an Entity List along with Huawei, ZTE and over 70 Chinese tech firms, barring the companies from doing business with US firms without a licence, according to the Wall Street Journal.
The latest measures could block Huawei from accessing chipsets, dealing a further blow to the Shenzhen-based tech giant after passing further restrictions on semiconductor technologies in August and extending the Entity List in May a second year.
China launched plans this month to boost the mainland chipmaker and others in a bid to distance from US technologies, with the additional funds set to be included in a draft of the Chinese Communist Party's 14th Five-Year Plan in October.
US president Donald Trump has threatened several mainland firms such as TikTok owner ByteDance, Huawei, Alibaba Group and WeChat owner Tencent, sparking anger and criticism from Chinese execs and government officials.