SMIC shares sink, U.S. ban worries cloud China's hopes for chip self-sufficiency

By Josh Horwitz and Donny Kwok
SHANGHAI/HONG KONG (Reuters) - Shares of China's SMIC <0981.HK> fell by over a fifth on Monday after news of potential U.S. sanctions against the chipmaker, wiping about HK$31 billion ($4 billion) off its market value and prompting analysts to predict doom if a ban is implemented.
On Friday, Reuters reported that the U.S. Department of Defense might block American companies from providing goods and services to SMIC, or Semiconductor Manufacturing International Corp, China's biggest chipmaker.
That could dash what some view as China's best hope to develop a self-sufficient semiconductor industry via SMIC and further escalate the Sino-U.S. spat that involves trade and technology, analysts said.
"The company could go under within a few years," says Mark Li, who tracks China's chip industry at Bernstein Research.
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