Title: SMIC Shares Plunge as US Congressmen Call for Further Restrictions on Exports
Introduction: China’s largest contract chipmaker, Semiconductor Manufacturing International Corp (SMIC), experienced a significant drop in its shares following the call from two US congressmen to impose stricter export sales restrictions on the company. This move comes after Huawei Technologies unveiled its latest smartphone, the Mate 60 Pro, which is believed to be powered by an advanced chip manufactured by SMIC. Industry experts are puzzled by how SMIC managed to develop such a chip, considering the US efforts to limit China’s access to foreign chip technology.
Details: TechInsights, a Canadian research organization specializing in semiconductors, confirmed that the Huawei Mate 60 Pro contains a new 5G Kirin 9000s processor specifically developed for Huawei by SMIC. Analysts from Jefferies described this development as a significant tech breakthrough for China. However, it also raised concerns among analysts that the ongoing US-China tech war could intensify in the near future.
Congressional Calls: US representative Mike Gallagher, chair of the House Foreign Affairs Committee on China, urged the US Commerce Department to cease all technology exports to both Huawei and SMIC. Gallagher pointed out that SMIC may have violated US sanctions, as it is unlikely that such an advanced chip could be produced without US technology. Texas Representative Michael McCaul expressed concerns about China attempting to monopolize the manufacture of less-advanced computer chips.
Stock Market Response: Following the calls by the US congressmen, SMIC’s shares plummeted by 8.3% in Shanghai and 7.6% in Hong Kong. Hua Hong Semiconductor, China’s second-largest chip foundry, also experienced a decline of 5.8%. Prior to this news, SMIC’s shares had rallied over 20% in just two weeks.
Implications and Reactions: Chinese state media celebrated this development as a sign of China’s success in breaking US sanctions and achieving technological independence in advanced chipmaking. Meme makers on the Chinese internet even humorously crowned US Commerce Secretary Gina Raimondo as the unofficial brand ambassador for the Huawei Mate 60 series. Raimondo’s recent visit to China coincided with the phone’s launch. Despite these developments, the Biden administration is expected to tighten the chips ban on China, potentially further limiting China’s access to advanced US semiconductors.
Conclusion: The recent drop in SMIC’s shares and the calls by US congressmen for stricter export restrictions highlight the intensifying US-China tech war. As China celebrates its tech breakthrough, the effectiveness of US sanctions is being questioned, and the potential for further escalations in the tech war between the two countries looms.