A Pentagon spokeswoman said the Defense Department was working with other agencies to determine whether to make the move against Semiconductor Manufacturing International Corporation, which would force US suppliers to obtain a special license before shipping to the company.
SMIC did not immediately respond to an email seeking comment.
The Trump administration has often used the entity list – which now includes more than 275 China-based firms – to hit industry sectors that China prioritizes, from telecoms equipment giants Huawei Technologies and ZTE over sanction violations, to surveillance camera maker Hikvision over suppression of China’s Uighur minority.
SMIC is the largest Chinese chip manufacturer but is second-tier to rival Taiwan Semiconductor Manufacturing Co Ltd , the industry’s market leader. It has sought to build out foundries for the manufacture of computer chips that can compete with TSMC.
While the Pentagon official did not outline the reasons for the action, SMIC’s relationship to the Chinese military is under scrutiny, another US official said.
Recently the administration has trained its focus on Chinese companies that bolster Beijing’s military. Last month, the United States blacklisted 24 Chinese companies and targeted individuals it said were part of construction and military actions in the South China Sea, its first such sanctions against Beijing over the disputed strategic waterway.