"In Complete Shock": China's Lead Chip Maker Denies PLA Military Ties As Trump Mulls Blacklisting

USSA News ^ | 09/05/2020 | Tyler Durden

[SeekAndFind]

Executives of Chinese companies which produce chips — vital in every device that stores data from computers to mobile phones to barcode scanners — are increasingly worried their industry is next on the Trump sanctions hit list, also after widespread reports that Beijing plans to in desperation ramp up its lagging domestic semiconductor development over the next decade as continued outside access to the most advanced chips looks increasingly in doubt.

Some are speaking out, attempting to make crystal clear to Washington that they are not puppets of either the Chinese state or PLA military. The country's largest and leading homegrown chipmaker, Semiconductor Manufacturing International Corp. (SMIC), is vehemently denying its technology is for military use after Reuters on Friday said Trump is mulling adding the publicly traded company to a US blacklist.

Via DigiTimes

The Shanghai-based company expressed that it is "in complete shock" over contents of the report, which said earlier this past week that "the Pentagon made a proposal to place SMIC on the entity list to the End User Committee, a panel led by the Commerce Department that also includes the State and Energy Departments and makes decisions about entity listings."

A follow-up official Semiconductor Manufacturing International statement said Saturday:

“The company manufactures semiconductors and provides services solely for civilian and commercial end-users and end-uses. We have no relationship with the Chinese military.”

The statement added, “Any assumptions of the company’s ties with the Chinese military are untrue statements and false accusations.”

At moment there's an inter-agency review underway in Washington over whether to add the company to the list, which would immediately require American suppliers to obtain a specially approved license in order to ship materials to the company. If it goes on the list, SMIC would go the way of Huawei in facing huge hurdles and intense scrutiny any time it does business with Western companies.

Meanwhile some are counter-threatening various nuclear option scenarios, a rapid downward spiral:

US/China tit-4-tat horror.
"The suggestion from econ prof Li Daokui that China curb exports of medicines as a means of countering US economic curbs on Chinese access to semiconductor products is plainly wrong, dangerous..."https://t.co/2jIKw0CoJv — Laurie Garrett (@Laurie_Garrett) September 1, 2020

Consider the dire warnings issued at the World Semiconductor Conference held in Nanjing at the end of August of the fragile early state of China's domestic capabilities.

Bloomberg relates of one of the more revealing conference moments:

“The entire chip industry is too fragile to defend itself. We are at least 20 years behind comparing to Silicon Valley from scale and quality of talent to size of the ecosystem,” said Wang Xuguang, chief executive officer of AINSTEC, a Suzhou-based company that develops 3D visual chips. “If we can prosper (with the U.S.), that’s the best, but if the situation doesn’t allow this to happen, we need to think what we have on our hands.”

Crucially, China remains the world's largest importer of chips, and will spend some $300 billion to import semiconductors this year.

The country still faces a huge technology gap in this area which Chinese developers have struggled to close over and ahead of more advanced industry rivals in the US, Japan, and Europe.

[drop 50 and fire for effect]

“We have no relationship with the Chinese military.”

There is no such thing as an independent Chinese company. Their government / military have their hands in everything.

The company’s statement is technically true. The People’s Liberation Army serves and is loyal to the Communist Party of China not China. The Government on the other hand is a useful facade for the Party, convienent tool as an extension of the Party, but not an independent entity. It has no purpose or use except to do the Party’s bidding.

All businesses over a certain size (and SMIC is certainly large enough) must have Party representatives on the board, this ensure that company decision makers follow Party policy, to include meeting the PLA’s requirements.

[Lurker]

It’s already upon us, old friend.

L

[Noumenon]

That is so. As Hamlet said, “The reasiness is all.” Despite my injuries, I’m still in the game. I’m concerned about your proximity to what will be one of many major centers of conflict, but I know you’ve got it handled. Going out to chalk zero on the FAL tomorrow.

[indthkr]

ChiCom tech bump for later...

[PIF]

If President Trump is reelected, and holds the Senate, I predict that things will get worse for the ChiComs next year.

``
And I predict that if Jo n the Ho win, Chinese language will be mandatory in all public schools; once private schools will become public. Corporations will go on a major Chinese hiring spree as American citizen are let go because they need too high a wage and they are not fluent in Chinese

[PIF]

We don’t make the chips with lead.

—
Yes we do and the chips come in various calibers; some use depleted uranium

[Gen.Blather]

It’s impossible to BE a big company in China and have no relationship with the Chinese military.

[Rlsau1]

People should remember that communism IS the the religion of communists. There is no law they will not break or lie they will not tell to further the revolution. They abhor organized religion since most require some adherence to moral and ethical standards. This is anethema to a communist. They use every resource (people, economies, money, etc.) to further the revolution which always strives for world domination. Their useful idiots in this country have sold out their own country and countrymen for personal gain, and will continue to do so until they are stopped.

[arthurus]

Nobody in China and no Chinese person to at least the second generation born in America or Europe does NOT have a “relationship” with the CCP. There are severe personal or family consequences for ignoring that tie.

[SauronOfMordor]

If President Trump is reelected, and holds the Senate, I predict that things will get worse for the ChiComs next year.

Which is more than enough motive for China to do whatever they can to influence the US election.

I would imagine that enough digging into Antifa's finances will find a Chinese connection.

I have no doubt that there are a huge number of Chinese people who are contributing heavy money to the Democrats.

[BobL]

There are literally NO Chinese manufacturing companies who don’t answer to the government there. That is how Fascist governments work.

[Fred Hayek]

Bovine Scat. The Chinese Communist Party is an active participant in every manufacturing location. A past engineering client had opened a plant in Zuhai recently and a CCP rep was at every meeting.