The United States has put dozens of Chinese companies, including chipmaker SMIC and Chinese drone maker DJI on the government’s ‘Entity List’. Being on the ‘Entity list’ of the US government results in trade bans between the listed organisations and US-based companies. Huawei has been one of the most highlighted member of the US entity list, banning the Chinese smartphone giant from doing business with any US-based companies.
While the exact reason of DJI being put on the Entity List is not known, reports have said that it could be due to alleged human rights violation by the Chinese government. Further, US also accuses DJI of supplying equipment to China so it can spy on and monitor its citizens for illegal purposes. Now, the drone maker being on the Entity List could concern many users of the brand in the country, but unlike Huawei, DJI does not incorporate any tech from high-profile US based companies. Hence, the company’s survival is still possible with only minor alterations. However, if a major component of one of its product is sourced from a US-based company, then that would need to be sourced from elsewhere.
However, this does not come as good news for DJI, even if the company continues selling its products under the limitations of the Entity List.
Apart from DJI, chipmaker SMIC has also been put on the entity list. However, the chipmaker will face a tough review standard when it seeks licenses for advanced US chipmaking equipment at 10 nanometers or below. Licenses for all other items shipped to the company will be reviewed on a case-by-case basis, the Commerce Department said. Shares in SMIC, formally known as the Semiconductor Manufacturing International Corp, fell 5.2% in Hong Kong on Friday, while the company’s Shanghai-listed shares declined 1.8%. The benchmark indices in the two markets were down less than 1%.