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How Chinese Chip Giant SMIC Can Evade Trump’s Newest Crackdown

  • SMIC has enough stockpiles, equipment to soldier on for now
  • It underscores the difficulty of chips as a geopolitical tool
SMIC Targets Sales Increase Of As Much As 20% In 2011

Photographer: Qilai Shen/Bloomberg

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Donald Trump’s latest headline-grabbing action against China is aimed at negating the Asian power’s push toward self-sufficiency in the $400 billion semiconductor industry. But its effectiveness is being questioned almost before the ink is dry, according to a growing chorus of voices in Washington and interviews with Chinese technology executives.

The U.S. is blacklisting Semiconductor Manufacturing International Corp. along with more than 60 of its peers deemed a threat to national security, depriving them of the American inputs from software to chemicals required to make their products. The key provision of the action against China’s largest chipmaker is a restriction on selling equipment and other items used to fabricate advanced chips, an area U.S. suppliers dominate.

But in a letter to Commerce Secretary Wilbur Ross Tuesday, Senator Marco Rubio and Representative Michael McCaul warned the action was “utterly ineffective” and fell short of crippling Beijing’s drive into next-generation semiconductors.