TIMES SEEM tough for China’s chipmaking champion, the Semiconductor Manufacturing International Corporation (SMIC). Over the past year America has attacked its supply chains, cutting it off from essential high-tech tools. It has slapped export controls on SMIC’s customers and enacted new rules which threaten to designate the firm as subservient to the People’s Liberation Army. The company’s sales slumped by 7% in 2019 to $3.1bn—not the kind of performance expected of a Chinese high-tech titan.
SMIC is one of many corporate casualties in the escalating conflict over access to advanced technology that is playing out between America and China. As the two geopolitical rivals try to decouple their economies, they and their allies have enacted tit-for-tat restrictions on each other’s software and hardware. On July 6th Mike Pompeo, America’s secretary of state, said America might ban TikTok, a Chinese-owned short-video app beloved of Western teenagers. Facebook, Google, Microsoft and Twitter have suspended habitual co-operation with Hong Kong police after the Chinese territory adopted a new security law giving Beijing greater control (of the quartet only Microsoft has significant business on the mainland that could be a target of Chinese retaliation).
You might reasonably conclude that limp revenues and American ire would be a...
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