HONG KONG: Shares in China’s Semiconductor Manufacturing International Corp (SMIC) tumbled on Monday in response to reports of potential sanctions against the company from Washington.
The fall could reflect dampening investor optimism toward the company, which some viewed as China’s best hope to develop a self-sufficient semiconductor industry, analysts said.
SMIC shares in Hong Kong fell as much as 15.2%, hitting HK$20.02, the lowest since June 16.
The stock was the fifth most actively traded by turnover in early trade.
Its Shanghai-listed shares fell as much as 11%. The company went public on the newly launched STAR Market earlier this year to raise more funds.
The Trump administration is considering whether to add China’s top chipmaker to a trade blacklist, a Defense Department official said on Friday, as the United States escalates a crackdown on Chinese companies.
While details remain scarce, the potential measures could effectively prevent U.S. companies from supplying goods and services to SMIC.
The proposed measures recall those placed by the U.S. Department of Commerce on Chinese smartphone maker Huawei Technologies Co Ltd [HWT.UL].
SMIC is China’s top semiconductor fab, and the closest domestic counterpart to Taiwan Semiconductor Manufacturing Co Ltd , the world’s most advanced maker of chips.
Despite steady government support since its founding in 2000, SMIC lags behind its rival both in terms of production volume and technology.
The company only recently introduced capacity for chips at the 14nm process node, making it about two generations behind that of SMIC.
Like TSMC and other fabs, SMIC relies on a number of U.S.-based companies to obtain key production equipment, such as Applied Materials .
Research firm Jefferies estimates that 40% to 50% of the company’s suppliers hail from the states.
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