US penalizes two Chinese companies that acquired tools for chipmaker SMIC

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By Karen Freifeld

(Reuters) -The United States on Friday penalized two Chinese firms that acquired U.S. chipmaking equipment for China’s top chipmaker SMIC, including them among 32 entities that were added to the Commerce Department’s restricted trade list, according to a U.S. government posting. Twenty-three of the 32 were in China.

GMC Semiconductor Technology (Wuxi) Co and Jicun Semiconductor Technology were placed on the list, formally known as the Entity List, for acquiring equipment for SMIC Northern Integrated Circuit Manufacturing (Beijing) Corp and Semiconductor Manufacturing International (Beijing) Corporation, the Federal Register posting said.

The SMIC companies were already on the Entity List and shipping U.S. equipment to them requires licenses, which likely would have been denied.

Shanghai Fudan Microelectronics Technology Co, which is involved in the production of high-performance computing chips, as well as associated companies and other entities in China, Singapore and Taiwan, were added to the list for acquiring U.S.-origin items “in support of China’s military modernization, for participating in China’s advanced computing and integrated manufacturing and distribution sectors, and directly supplying the military, government, and security apparatus of China.”

Shanghai Fudan Microelectronics also has supplied technology to Russian military end users, according to the Commerce Department, which put an additional restriction on the company.

The companies could not immediately be reached for comment.

Entities in India, Iran, Turkey and the United Arab Emirates also were added to the list, the posting showed.

(Reporting by Karen Freifeld; Additional reporting by Ismail Shakil and David Shepardson; Editing by Edmund Klamann)