China's largest foundry corporations, SMIC, is suspected of supporting semiconductor manufacturing technology for Iran's military. With the Middle East at war, the possibility has grown that U.S.-China tensions will escalate further.
According to Reuters, senior officials in the U.S. Donald Trump administration said on the 26th (local time) that SMIC has been supplying chip manufacturing equipment to Iran for about a year. They explained that the process of providing the equipment likely included technical training.
The officials did not say whether the equipment was made in the United States. However, they noted that if the equipment is U.S.-made, it could amount to a violation of sanctions on Iran. SMIC, the Chinese government, and Iran have not issued an official position on the allegations.
The Chinese government maintained that the transaction with Iran is normal commercial activity. SMIC has also denied past allegations of ties to China's military-industrial complex.
The latest allegations could reverberate further in tandem with recent developments in the Middle East. After Israel and the United States attacked Iran and the war escalated, China publicly maintained a neutral stance while diplomatically urging de-escalation.
The United States believes SMIC's technical support could be used by Iran's military-industrial complex. Semiconductors are core components used across military systems, including missiles, communications, and radar.
The United States has continued stringent export controls on Chinese semiconductor corporations, including SMIC. It has pushed a technology blockade strategy by restricting the inflow into China of advanced equipment from major equipment corporations such as Lam Research, KLA, and Applied Materials.
Even so, China has pressed ahead with technical workarounds to circumvent sanctions. In 2023, Huawei launched a smartphone equipped with its self-designed "Kirin 9000S" chip, demonstrating the potential for technological self-reliance. SMIC also cracked the U.S. technology blockade by succeeding in producing 7-nanometer-class chips through multi-patterning processes using deep ultraviolet (DUV) lithography equipment.
In response, starting in 2024, the U.S. government further tightened export controls on equipment bound for SMIC. With the latest allegations added, the two countries' competition for technological hegemony has shown signs of spreading into the military and diplomatic realms.