Though the chip manufacturing company said the restriction will not have a severe impact on its business, the news creates panic on the stock market.
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On December 3, 2020, Trump’s administration adds China leading chip manufacturer, SMIC, to the blacklist of alleged Chinese military companies. With the restriction, U.S. investors are not allowed to long their stock in 60 days and to trading stocks in one year.
According to the latest announcement from SMIC, the company holds a view that the ban will not severely impact its business because the company operates as an independent international enterprise with stakeholders all over the world. The co-CEO of SMIC, Liang Mong Song, said the company is working ON mitigating the impact of the U.S. crackdown on its business by restating that the company has never ventured into military business.
Impacted by the bearish news, SMIC’s Hong Kong stocks (00981:HK) dives over 7% during the day and closes at HKD 21 per stock, down 5.41% compared with yesterday’s price. While in the China stock A market, SMIC’s stock (688981:SH) dives 3.31% and closes at CNY 58.20. It is estimated that, if the President-elect Biden's administration eases the restriction on export and import, the impact on SMIC could be mitigated.