Taiwanese news site NewTalk recently reported that U.S. Pentagon officials advised that the Trump administration is considering blacklisting Chinese domestic chip maker SMIC due to its ties to the Chinese military. This could cause major damage to the Chinese chip-making industry, since SMIC is China’s largest and the most advanced chip manufacturer. It is also Huawei’s only hope for low-end chip supply. SMIC has issued announcements claiming it has no relationship with the Chinese military. However, according to Mainland media reports, SMIC was the sole manufacturer for the KD5660 Level-A network exchange chip designed by a company named ArmyFly, which is headquartered in Beijing and is dedicated to serving the Chinese military with focuses on army information network and equipment innovation. The KD560 chip even won the highest award issued by the Equipment Development Department of the Central Military Commission. ArmyFly’s customers are all military branches and SMIC, as its award-winning chip supplier, now declares it has nothing to do with ArmyFly.
Source: NewTalk, September 10, 2020