The US administration considers putting the foundry SMIC on its Entity List

SMIC is a Shanghai-based company that, like the Taiwan Semiconductor Manufactuing Company (TSMC), fabricates chipsets to order. It supplies companies such as the start-up Phytium with its SoCs, and had reportedly been one of the organizations approached as an alternative buyer to NVIDIA as SoftBank sought to offload ARM.

Thanks to its location, it has also been able to remain a supplier to Huawei, whereas the US administration's amended trade restrictions had cut this OEM off from typical partners such as TSMC. However, it does not operate at quite the end of the market as this Taipei-based corporation: it has only been able to manufacture processors such as the Kirin 710A thus far.

Nevertheless, a new Reuters article indicates that the American government may move to place this chipmaker on the Entities List as well, ostensibly so it can no longer sell to Huawei. This is reportedly due to claims from US defense contractors that SMIC may be connected to CETC, which develops military-grade electronics and is owned by the Chinese state.

SMIC has denied such claims in a statement in reaction to this news, also noting that it had been in "complete shock" since hearing it. Should the company be blacklisted, it may impact negatively on its own suppliers, which include the US-based companies Applied Materials, KLA Corp and Lam Research.