SMIC logo [Reuters = Yonhap News]

China's foundry firm SMIC has been supplying chip manufacturing technology to Iran's military, two senior officials from the U.S. Donald Trump administration said on the 26th (local time), according to Reuters.

One of the sources cited in the Reuters report said that SMIC began sending chip manufacturing equipment to Iran about a year ago and added, "There is no reason to believe that such support has ceased."

He further stated, "It is almost certain that this cooperation would have included technical training on SMIC's semiconductor technology."

The officials, who spoke on condition of anonymity, did not disclose whether the equipment was of U.S. origin.

If the equipment was U.S.-made, sending it to Iran could constitute a violation of U.S. government sanctions against Iran.

Spokespersons for SMIC, the Chinese Embassy in the U.S., and the Iranian mission to the UN did not immediately respond to Reuters' requests for comment.

Lin Jian, a spokesperson for China's Ministry of Foreign Affairs, when asked about the matter during a briefing on the 27th, said, "I am not aware of the situation you mentioned." He added, "What I can tell you is that recently, some media outlets have been actively spreading seemingly plausible but actually untrue (似是而非) news. (We) have verified that it was fake news."

The Chinese government maintains its position that it is conducting normal commercial trade with Iran.

SMIC, which was placed on the U.S. Commerce Department's export control list in 2020, has denied allegations of ties to China's military-industrial complex, including the People's Liberation Army.

Since the start of the Middle East war on February 28th with surprise attacks by Israel and the U.S. on Iran, China has not publicly taken sides.

Chinese Foreign Minister Wang Yi urged the parties involved this week to seize every opportunity to start peace talks as soon as possible.

As senior U.S. government officials raise suspicions that SMIC has been providing semiconductor technology to Iran's military, tensions between the U.S. and China are likely to escalate further.

Last month, Reuters reported that Iran was on the verge of signing a contract to purchase anti-ship cruise missiles from China as the U.S. deployed significant naval forces near Iran's coast ahead of potential attacks on Iran.

Reuters reported that it was not immediately confirmed what specific role the chip manufacturing equipment sent by SMIC to Iran played in Iran's response in the ongoing war.

One of the U.S. officials who spoke for the report said that the equipment was provided to Iran's military-industrial complex and could be used in any electronic device requiring chips.

The U.S. government has been restricting China's access to advanced chip manufacturing equipment from major U.S. suppliers such as Lam Research, KLA, and Applied Materials in its effort to curb China's advanced semiconductor manufacturing capabilities through sanctions on Chinese semiconductor companies like SMIC.

However, in August 2023, China's Huawei surprised the world by releasing new smartphones, including the Mate 60 Pro, equipped with its self-designed "Kirin 9000s" chip, despite strong U.S. sanctions.

The U.S. was confident that China would not be able to produce advanced chips below the 14nm node, as it could not obtain extreme ultraviolet (EUV) lithography equipment due to U.S. export controls.

However, SMIC's technical team devised a "multi-patterning" process that repeatedly uses older deep ultraviolet (DUV) lithography equipment to successfully implement 7nm chips, a symbolic event that marked a breach in the U.S. technological blockade.

Consequently, the U.S. government further intensified pressure by blocking additional exports of U.S.-made equipment and components to SMIC's Shanghai facility starting in early 2024.