SMIC has a way out of the latest US restrictions, but it may not help

The US Department of Commerce is going after SMIC’s alleged connections to the Chinese military rather than placing it directly on the entity list, potentially offering SMIC a way out of its current predicament. On 25 September, the US Department of Commerce communicated new restrictions on the export of certain products to SMIC. Companies that wish to export products covered by a list of categories will now have to apply for a license to export their products. Without access to US technology, SMIC faces a severe curtailment on its activities potentially putting the company out of business. SMIC could very well fall much further which will make Huawei feel fortunate that it has not gone to IPO.

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