(Yicai Global) Dec. 21 -- China’s largest chip foundry Semiconductor Manufacturing International Corp confirmed yesterday its entry onto the US commerce department’s Entity List. Its addition to this registry of firms barred from trade with American companies will stunt its development and ability to build advanced 10 nanometer and under processes, it said.

SMIC will be unable to gain certain technology and products from US companies without a US government okay, it added in its statement yesterday. The Department of Commerce adopts a ”Presumption of Denial“ of approval policy for products or technologies used at 10nm and below, including extreme ultraviolet lithography. The company’s foundry services for its special customers thus may also suffer a body blow.

The firm has staunchly opposed the US move since learning from media of its possible stigmatization by the US trade agency, it said. The company’s operations are all compliant and it has never plied any business with a nexus with military applications, it reiterated.

“The matter will have no material, adverse impact on the company’s short-term operations and financial condition and the firm will continue to communicate with relevant US government departments to minimize the unfavorable impact,” SMIC said in its statement.

The Shanghai-based company’s shares [HKG:0981] closed 2.82 percent down at HKD19.30 (USD2.49) at noon today following the revelation.

The inclusion of SMIC in the Entity List has also rocked the global chip industry, the Securities Times reported, citing a research report from Beijing-based Cinda Securities.

The ban clearly mandates rejection of the approval of processes of 10nm-and-below, and thus SMIC’s development of these advanced processes will come to a screeching halt. The revenue of US equipment suppliers will become the first casualty of SMIC's inclusion in the rogues’ list, the Cinda report also predicted.

The US Department of Commerce added a further 59 Chinese companies and individuals, including SMIC, to its register of those subject to export controls for “violating US national security” on Dec. 18 to curb the access of these entities and persons to high-end technology.

Editor: Ben Armour, Xiao Yi