By Alexandra Alper

WASHINGTON (Reuters) – The Biden administration will consider concerns about Chinese chip designer Brite Semiconductor flagged by Republican Senator Marco Rubio as it decides what firms to add to a trade sanction list, the Commerce Department said.

The concerns were raised in a letter calling on the agency to sanction the company after Reuters reported in December that it was part-owned by blacklisted Chinese chipmaker SMIC and offers chip design services to at least six Chinese military suppliers.

Reuters also revealed that the Shanghai-based company had financial backing from American sources including Wells Fargo and access to topnotch U.S. chip design software made by Synopsys and Cadence.

“Brite’s example shows that swift action is needed now to prevent China’s chip industrial base from growing stronger,” Rubio wrote in the December letter addressed to Commerce Department Secretary Gina Raimondo, citing the Reuters report.

“I urge you to impose the same licensing requirements on Brite that are imposed on SMIC,” Rubio said.

SMIC, China’s top chipmaker, was added to a trade sanction list known as the Entity List over its apparent ties to the Chinese military industrial complex. SMIC has previously denied any ties to China’s military, saying that it manufactures chips and provides services “solely for civilian and commercial end-users and end-uses.”

“With respect to Brite, (Commerce) will keep your concerns in mind as it assesses potential new additions to the Entity List,” a Commerce Department official wrote in response to Rubio in a letter dated March 8 and seen by Reuters.

Rubio welcomed the response but urged the agency to take more concrete steps.

“While it is encouraging the bureau recognizes it has the authority to blacklist Brite and tighten export controls on American chip-design software, those words are meaningless unless the Biden Administration takes swift action,” Rubio said.

Asked for comment, the Chinese embassy in Washington said that China firmly opposed the U.S. “overstretching” the concept of national security and setting up discriminatory lists.

“We urge the U.S. to immediately correct these discriminatory practices and provide a fair, just and non-discriminatory business environment for Chinese companies,” an embassy spokesperson said in an email.

Brite and SMIC did not immediately respond to requests for comment.

The news came out a day before Brite’s shares were set to begin trading on the Shanghai stock exchange.

Shares in Brite jumped 171% on their first day of trading, against a 0.24% rise in the blue-chip CSI 300 index.