In response to recent news reports in the press that SMIC may be placed on a trade blacklist by the Trump administration, industry groups have taken action. The news that it could be put on a trade blacklist by the U.S. Commerce Department sent SMIC’s shares down nearly a quarter.
According to a Reuters report on September 16, industry companies and organizations plan to warn the Trump administration not to propose a blacklist of SMIC because it would “harm” U.S. industry.
semiconductor Equipment and Materials International (SEMI) has drafted a letter that could be delivered to Secretary of Commerce Wilbur Ross as early as this week. The version of the letter, which may not have been finalized, said that blacklisting SMIC would undermine U.S. technological advantages, as the consequences of making it harder for U.S. companies to supply SMIC would harm relevant U.S. companies. In terms of sales and profits of the company, it is reported that as much as $5 billion in annual sales of U.S.-originated equipment and materials comes from SMIC.
It is reported that SEMI has 2,400 members distributed around the world. They believe that if SMIC is blacklisted, it will make people feel more “unreliable” in the delivery process of US goods, which will hit the market share of US-related companies.