SMIC seems to be hoarding goods in response to the ban in the United States

According to Bloomberg reports, SMIC is currently accelerating the procurement of various key equipment and parts, and it seems that it is hoarding goods in response to the regulatory requirements of the US Department of Commerce.

It is worth noting that when documents from the Bureau of Industry and Security of the US Department of Commerce were circulating on the Internet, SMIC denied that it was blocked because the company had not received notification.

However, it was at this time that SMIC started to accelerate the procurement of materials, including key equipment in the semiconductor field and various replacement parts and even raw materials.

Although it did not last long for SMIC to confirm that it was indeed blocked, SMIC’s suppliers have now received the US Department of Commerce’s request for export restrictions.

SMIC supply Huawei

According to media reports, the scale of SMIC’s procurement from upstream supply chain companies such as the United States, Europe, and Japan has exceeded the material demand for the entire year of 2020.

The key equipment purchased includes key equipment and test machines in the field of chip manufacturing such as etching, lithography, and wafer cleaning agents, as well as a large number of daily consumables.

The purchase of these materials exceeds the demand for one year of use. Of course, it seems that it is necessary to stock up in advance because it is not convenient to purchase in the future.

At present, if US companies want to continue to supply SMIC, they need to apply for a license from the US Department of Commerce. Of course, most applications may be approved.

This means that a large number of key equipment and raw materials in the chip manufacturing field can no longer be exported to SMIC, which will have a negative impact on the entire supply chain.