SMIC shares fall as Chinese chipmaker warns of hit from US curbs

Shares in Semiconductor Manufacturing International Corporation fell after China’s largest chipmaker said US curbs could hit its business, a development that analysts say imperils its quest to challenge foreign rivals.

SMIC’s Hong Kong-traded shares fell more than 5 per cent on Monday after the group confirmed that the US Department of Commerce now requires American companies to apply for an export licence before selling it supplies, as earlier reported by the Financial Times.

“As the supply period of certain equipment, accessories and raw materials exported from the US will be extended or are subject to uncertainties, it may have potential material adverse effects on the company’s future production and operations,” SMIC said in a filing to Hong Kong’s stock exchange on Sunday evening.

Analysts said that while Washington’s restrictions on critical exports of semiconductor equipment to SMIC appear highly specific at first glance, they could amount to the heaviest blow yet to China’s ambitions to build a viable, self-reliant semiconductor industry.

The sanctions are likely to halt expansion of SMIC’s fabrication plants and could cause foreign customers to switch orders to rivals, industry experts believe.

The “impact of the sanctions against SMIC will be much…

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