Overview
Two senior U.S. administration officials have said that China’s largest semiconductor manufacturer, Semiconductor Manufacturing International Corp. (SMIC), has supplied chipmaking tools to Iran’s military. According to the officials, the shipments began roughly a year ago and are believed to have included not only equipment but also technical training on SMIC’s semiconductor technology.
The officials spoke anonymously so they could discuss previously undisclosed U.S. government information. One of them stated, "we have no reason to believe that any of this has stopped," while another said the collaboration "almost certainly included technical training on SMIC’s semiconductor technology." A separate official characterized the recipients as Iran’s "military industrial complex," and cautioned that the tools could be applied to any electronics that require chips.
Sanctions, trade controls and company responses
SMIC was placed on a trade blacklist in 2020 that restricts its access to U.S. exports. The company has denied that it has links to China’s military-industrial complex. Officials did not specify whether the tools shipped to Iran were of U.S. origin - a detail that matters because U.S.-origin equipment sent to Iran would likely breach U.S. sanctions.
Requests for comment to SMIC, the Chinese Embassy in Washington, and the Iranian mission to the United Nations were not immediately answered, according to the officials who provided the information. The Chinese government has publicly maintained that its trade with Iran is normal commercial activity. Chinese Foreign Minister Wang Yi has urged parties to seize opportunities to start peace talks as soon as possible.
Context of tightened U.S. measures
Washington has been moving to limit China’s ability to produce advanced semiconductors by restricting access to key manufacturing equipment. U.S. policy has targeted suppliers of advanced tools that U.S. companies provide to Chinese firms, including firms such as Lam Research, KLA and Applied Materials, with the goal of stymieing the development of cutting-edge chip production in China.
U.S. authorities tightened restrictions on SMIC in 2024 by cutting off certain U.S. imports to one of its advanced factories following the production of a sophisticated chip for Huawei’s Mate 60 Pro phone, according to the information provided by officials.
Regional security and market implications
The allegations come as the U.S. and Israel conduct military action involving Iran that began on February 28, an operation that has affected financial markets, contributed to higher oil prices and fueled concerns about global inflation. It remains unclear what role, if any, the chipmaking tools provided to Iran may have played in Tehran’s response to the conflict.
Last month, reports indicated Iran was close to a deal with China to purchase anti-ship cruise missiles, a development noted as the United States had deployed a large naval force near Iranian waters ahead of strikes on the Islamic Republic. Officials have warned that the new allegations could heighten tensions between Washington and Beijing as U.S. policy simultaneously pressures Iran militarily and seeks to choke off China’s access to advanced semiconductor technology.
Commercial and investor signals
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Uncertainties
Officials did not provide details on the precise nature of the equipment, whether any of it was of U.S. origin, or how extensively the technical training was transferred. These gaps leave open significant questions about potential sanctions violations and the actual capabilities that may have been transferred.
This article reports the information provided by U.S. officials and notes the responses and positions described by Chinese authorities and SMIC, where available.