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China’s top chip maker SMIC keeping a low profile after US warning over Russian sanctions

  • SMIC’s revenues from customers in Eurasia, including Russia, are only around 12 per cent of its total, based on fourth quarter 2021 numbers
  • Xiaomi was the leading smartphone brand in Russia in 2021, with a 31 per cent market share, followed by Samsung with 27 per cent and Apple with 11 per cent

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SMIC has focused on mature technology nodes due to US sanctions. Photo: Costfoto/Barcroft Media via Getty Images

China’s top wafer foundry Semiconductor Manufacturing International Corp (SMIC) is keeping a low profile after it was singled out by Washington in a warning to Chinese tech companies over potential violations of US economic sanctions on Russia.

Gina Raimondo, the US secretary of commerce, said on Tuesday that Washington could take “devastating” action against Chinese companies that defy US sanctions on Russia for its invasion of Ukraine, according to a report in The New York Times.

She specifically referred to SMIC, saying the US could “essentially shut” the company down by denying it access to US chipmaking tools and software if it sold chips to Russia.

When reached by the Post on Thursday, SMIC declined to comment. Most Chinese tech companies have refused to speak publicly about the situation. On Wednesday, two directors of the UK subsidiary of Chinese telecoms giant Huawei Technologies Co resigned in protest after the company refused their request to publicly denounce Russia’s aggression.

Chinese foreign ministry spokesman Zhao Lijian said on Wednesday that US sanctions should not hurt the “appropriate interests” of Chinese firms.

“Although China may be able to provide some assistance to Russia in chips made with mature process [nodes], China will also consider potential repercussions from assisting Russia,” said Arisa Liu, a senior semiconductor research fellow at the Taiwan Institute of Economic Research.

Liu said any violation of US export sanctions against Russia would likely weaken SMIC’s ability to produce mature technology nodes, and further hamper its efforts to try and keep up with advanced technology, as US tools and technology remain crucial for its long-term development.

SMIC’s direct exposure to the region is relatively small. In the fourth quarter of 2021, its total revenue from customers in Eurasia, including Russia, was less than US$200 million, equal to 12.1 per cent of its total quarterly revenue of US$1.58 billion.

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