SMIC shares fall on stories of government resignation

© Reuters

From Gina Lee – Chinese chipmaker Semiconductor Manufacturing International Corporation (SMIC) dropped its shares on Wednesday after a top executive reportedly submitted a surprise resignation.

SMIC’s Shanghai (SS 🙂 shares fell 7.38% to CNY 54.12 ($ 8.27) by 11:26 p.m. ET (3:26 p.m. GMT) after shedding 9, 8% had fallen. The company’s Hong Kong shares (HK 🙂 have been suspended from trading.

A listing on the stock exchange said that SMIC was reviewing the veracity of a resignation circulated in online media and reportedly written by Co-Chief Executive Officer Liang Mong Song. The company tried to contact Liang to clarify its intentions, but did not provide any further details.

The US Department of Defense blacklisted the company on Dec. 4 of suspected Chinese military companies and classified it as a national security threat.

Three other companies, China National Offshore Oil Corporation, China Construction Technology Co. Ltd. and China International Engineering Consulting Corporation, were also blacklisted on the same day. Adding the four companies brings the total number of companies on the list to 35.

Inclusion on this list means that a press release states that Americans are restricted in their dealings with SMIC traded securities or securities that underlie the derivatives underlying such securities.

Beginning December 4 in Beijing, not all Americans will be allowed to buy the company’s securities for 60 days, and all Americans will not be allowed to trade SMIC securities for 365 days. This comes from an ordinance US President Donald Trump enacted on November 12, the press release added.

Founded in 2000 and headquartered in Shanghai, the company is China’s largest foundry specializing in the manufacture of semiconductors. SMIC is also at the center of China’s ambitions to build a domestic semiconductor industry and free the country from its dependence on US chip technology.

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