The US said it was concerned Semiconductor Manufacturing International Corporation (HKG: 0981), or SMIC, had links to the Chinese military, Reuters has claimed. As such, the firm will now have to jump through more hoops in order to import equipment from the US.
SMIC insisted it was a purely civilian firm and had no links to the PRC military.
The company said in a statement: “SMIC reiterates that it manufactures semiconductors and provides services solely for civilian and commercial end-users and end-uses.”
The sanctions do not amount to a ‘blacklist’, which would make any deals with the US even harder.
The move is not unprecedented. US officials were considering blacklisting SMIC just weeks ago, before deciding on this less severe action.
However, other firms such as Huawei have been subject to a total ban on working with US companies.
The US has cited national security concerns due to suspected links between such firms and the Chinese government or military.
Following the US action, the UK also took steps towards eliminating Huawei technology from its 5G network.
US president Donald Trump has also taken a tough stance on Chinese social media firm TikTok in recent weeks.
Only last night, it was revealed a US judge had blocked Donald Trump’s efforts to block TikTok from being sold on US app stores.
Judge Carl Nichols did not give a reason for the block – which is only temporary.
TikTok said it was pleased with the result, arguing it would be constitutional and a violation of free speech if the ban were to go ahead.
The US Department of Commerce said it would abide by the temporary block of the TikTok app store ban, but warned it would “vigorously defend” the ban going forward.
The president had initially said he would ban the app in the US, before announcing this could be avoided if a US firm took ownership of the app’s US operations.
Two weeks ago, US technology firm Oracle confirmed Bytedance, TikTok’s owner, had chosen it to be its “technology partner”, beating former frontrunner Microsoft.
However, it was unclear whether Oracle would actually buy TikTok as a result of the opaque deal, Arstechnica reports.
Last week TikTok said in a statement there was “ongoing” dialogue over the deal.