The United States Accuses SMIC, Chinas Leading Semiconductor Manufacturer, of Supplying…

In the midst of the conflict in the Middle East, the leading Chinese manufacturer of electronic chips is reported to have supplied Iran with essential chip-making technologies, according to Washington. These technologies are crucial for modern drones and missiles.

The Chinese group Semiconductor Manufacturing International Corporation (SMIC), the country’s main chip manufacturer, is said to have provided semiconductor manufacturing equipment and electronic chip technology to the Iranian military, as reported by senior US officials cited by Reuters.

Already heavily sanctioned by the United States for its alleged ties to the Chinese military, SMIC allegedly began these deliveries about a year ago, with no signs indicating their interruption.

According to these same sources, this collaboration goes beyond equipment supply and “most likely” includes technical training in semiconductor technologies. However, officials did not specify if these tools included components or technologies of American origin, which could constitute a direct violation of current sanctions.

The Chinese government claims to maintain “normal” commercial relations with Iran, while SMIC, blacklisted by the US since 2020, still denies any connection to the Chinese military-industrial complex. Beijing has not publicly taken sides in the Middle East conflict, with its Minister of Foreign Affairs Wang Yi calling for a swift resumption of negotiations and also denouncing “false” news regarding the supply of electronic tools to Iran.

Growing Tensions

However, these accusations could escalate tensions between Washington and Beijing, as the United States seeks to contain both Iran and the rise of the Chinese semiconductor industry. In this context, Reuters recently reported a possible deal between Tehran and Beijing for the purchase of anti-ship cruise missiles outfitted with modern chips, at a time when the US was strengthening its military presence in the region.

The exact role of these equipments in the conflict remains uncertain. According to Washington, they were provided to the Iranian military-industrial complex and could be used for various electronic applications requiring chips. For several years, the US has been trying to curb Chinese capabilities in this field by imposing sanctions on entities like SMIC, also limiting their access to advanced technologies from American or allied groups like ASML. This strategy was further reinforced in 2024 by the Biden administration, especially after SMIC developed an advanced chip for Huawei’s Mate 60 Pro smartphone, despite the existing restrictions.

Rise of Chinese Power

Despite the sanctions, China continues to significantly increase its production. In 2025, the company ramped up its capacity to 1.06 million wafers per month, which is 111,000 more than the previous year, while investing 5.52 billion yuan (about 779 million dollars), over 8% of its revenue, in research and development.

This power surge is part of a larger trend. According to the South China Morning Post, Chinese manufacturers are rapidly expanding their capacities to meet the demand for artificial intelligence, by setting up new production lines and expanding their factories. Based on data presented at Semicon China, an international fair held in Shanghai on the subject, China could account for 42% of the global wafer production capacity for current processes by 2028, with 47 out of the 108 planned factories worldwide set to be in China.