US-China tech war: Suppliers to SMIC said to be struggling to get export licences
- The Trump administration placed SMIC on an entity list that requires US suppliers to obtain licenses to sell to the Chinese chip giant
- Sources say approvals from the US government have been slow to come
The US government has been slow to approve licences for American companies like Lam Research Corp and Applied Materials to sell chip production equipment to Chinese foundry Semiconductor Manufacturing International Co (SMIC), sources said, as the impact of a global chip shortage spreads.
Many licences for US suppliers to ship an estimated US$5 billion dollars’ worth of equipment and materials have not come through, according to more than half a dozen industry sources, though numerous companies submitted applications soon after the Chinese company was blacklisted in December. Certain licences have been granted, including for small numbers of expensive equipment in recent days.
As policy shifts under President Joe Biden, who took over from Donald Trump in January, US government agencies led by new appointees still have not completely decided what should be sold to SMIC, which produces chips for Qualcomm and other American companies.
The listing, which requires US suppliers to obtain a licence before shipping goods to SMIC, is unusual because it says most products should be granted on a case-by-case basis. However, equipment that can be used to make only the most advanced, 10-nanometre and smaller chips is likely to be denied licenses.
The Biden administration is supposed to make decisions on licence applications within a month, but follow-up questions stop the clock.