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The US has set restrictions on China’s biggest chipmaker out of concerns about military use of technology. 

The US Commerce Department sent a letter to companies in the states reportedly telling them they must get a license before exporting certain goods to Semiconductor Manufacturing International Corporation (SMIC). Exports to the company “may pose an unacceptable risk of diversion to a military end use in the People’s Republic of China,” according to

SMIC said it makes chips and provides services solely for commercial and civilian customers and purposes and has no relationship with the Chinese military.

The Times notes that though SMIC is China’s most technologically advanced manufacturer of semiconductors, it lags years behind industry-leading chipmakers and can’t make chips that support the most cutting-edge applications. And for the processors it does make, it relies on equipment and software from American companies.

Asked about the Commerce Department’s letter and the new export restrictions, a spokesperson for the Commerce Department’s Bureau of Industry and Security said in a statement to that the BIS can’t comment “on any specific matter.” The BIS “is constantly monitoring and assessing any potential threats to US national security and foreign policy interests,” the spokesperson added, and “will take appropriate action as warranted,” along with its interagency partners.

In February, a group of 42 countries agreed to add military-grade software and manufacturing technology for weapons-capable chip parts to an international list of items subject to export controls in an effort to counter cyberattacks and other threats and  prevent military technology from leaking to states like China, North Korea and Iran. .

Last year, the US placed restrictions on companies selling gear to Chinese telecommunications giant Huawei, over concerns about Huawei’s relationship with the Chinese government and fears that its equipment could be used to spy on other countries and companies.