Export-import bank's China loan decision is bad news for U.S. equipment makers.

One of the most important developments in the world semiconductor industry during the past quarter was the U.S. government's decision not to approve a loan application for the export of $769 million of U.S. semiconductor manufacturing equipment to China's Semiconductor Manufacturing International Corporation (SMIC), according to the U.S.-Taiwan Business Council.

The Export-Import Bank's decision against considering the loan "is significant not only for those U.S. equipment suppliers that would have benefited from the deal, but also for the future of the U.S. semiconductor industry and [the U.S.] economy as a whole," says Rupert Hammond-Chambers, president of the council. "At issue here is the fact that the U.S. semiconductor equipment industry depends on exports to foreign markets --particularly in Asia--for a majority of its sales, and not enabling our industry to have access to these markets will force companies like SMIC to purchase equipment from Japanese, European and Korean suppliers. Since the international competitiveness of U.S. suppliers is tied inextricably to the ability of the companies to provide jobs and increasingly advanced technology solutions--thus maintaining the U.S. leadership position in the industry--the U.S. government should be more supportive of export opportunities such as this."