Management did not comment directly on SMIC, but did inform Reuters It was “constantly monitoring and assessing” potential threats to US security and foreign policy.

Meanwhile, SMIC appeared to be taken aback. A company spokesperson said the chip giant had received no official word about the restrictions and repeated any military engagement. The company offers chips and services “only to civilian, commercial and end-use end users,” according to the representative.

The semiconductor producer is the second tier one to be added to the entity list After Huawei. While the effect of the ban will not be apparent until the Commerce Department decides who (if anyone) gets a license, it could represent a major blow to Chinese technology as a whole. SMIC may have to resort to non-US technology whenever it wants to upgrade its manufacture or service its equipment, and there is no guarantee that it will find what it needs. It may find itself lagging behind competitors who have access to a wide range of equipment.

This may have an indirect effect on companies that rely on SMIC. Huawei needs SMIC to make it Some Kirin chips In its phones, especially after losing access to partners like TSMC – it might run into another problem if SMIC can’t fulfill demands under the new restrictions. It would not be surprising if the Chinese government retaliated by imposing similar restrictions on US companies.