Hong Kong shares of China's SMIC plunge as Trump considers adding firm in blacklist

[HONG KONG] Shares of Hong Kong-listed Semiconductor Manufacturing International Corp (SMIC) fell as much as 15.2 per cent to HK$20.02, the lowest since June 16, after a US official said it was considering adding the Chinese firm to a trade blacklist.

The stock was the fifth most actively traded by turnover in early trade.

Its Shanghai-listed shares fell as much as 11 per cent.

The Trump administration is considering whether to add China's top chipmaker SMIC to a trade blacklist, a Defence Department official said Friday, as the United States escalates a crackdown on Chinese companies.

While details remain scarce, the potential measures could effectively prevent US companies from supplying goods and services to SMIC. The proposed measures recall those placed by the US Department of Commerce on Chinese smartphone maker Huawei Technologies.

SMIC is China's top semiconductor fab, and the closest domestic counterpart to Taiwan Semiconductor Manufacturing, 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.

Like TSMC and other fabs, SMIC relies on a number of US-based companies to obtain key production equipment, such as Applied Materials. Research firm Jefferies estimates that 40 per cent to 50 per cent of the company's suppliers hail from the states.

REUTERS