US To Impose Sanctions On Huawei & SMIC For 7nm Chip Manufacturing

Washington is set to apply sanctions on both Huawei and SMIC amid their involvement in the manufacturing of 7nm semiconductor chips.

US To Impose Sanctions On Huawei & SMIC For 7nm Chip Manufacturing

Ten GOP lawmakers signed the letter and sent it to the US Commerce Department urging to declare heavy sanctions upon two big Chinese tech companies, Huawei and Semiconductor Manufacturing International Corporation (SMIC), for violating US laws. The Two companies exhibited advanced smartphone chips created domestically, but this production bypasses US export control. Chairman of the Foreign Affairs Committee of the House Micheal McCaul (R-Tex) and nine other lawmakers signed the letter on Thursday and sent it to Undersecretary of Commerce Department Alan Estevez. The letter urged the undersecretary to impose sanctions on the Chinese chip industry and to punish Huawei and SMIC companies for allegedly violating the US export laws.

Recently, Huawei introduced a smartphone equipped with a new advanced processor developed by SMIC. This launch was at the same time as Commerce Secretary Gina Raimondo was on a trip to Beijing, causing a stir in US policy circles. It seems that Washington’s four-year efforts to stop China’s state-backed tech administrators from transitioning to 5G chip technology have been unsuccessful. It is reported that the US campaigned for almost four years to halt the Chinese companies from manufacturing the advanced 5G chips.

Huawei’s new smartphone Mate 60 Pro was sent to lawmakers for testing purposes to investigate if Chinese firms violated US sanctions on making the chips. The letter from lawmakers outlines how the Commerce Department could use export controls law to impede China’s chip creators in the future.

There’re Loop Holes In US Export Controls, Experts

The letter requested the Commerce Department to establish a sanctions authority under the International Emergency Economic Powers that would specifically target China. It would have the power to impose “full blocking sanctions” on Huawei and SMIC. Additionally, the letter demanded that all current export licenses granted to Huawei and SMIC be canceled and urged for criminal charges to be filed against the executives of these companies.

Republican lawmakers addressed the complaints by some individuals in Washington that the export controls had gaps, which resulted in US technology continuing to reach China. Nazak Nikakhtar, who served as an assistant secretary at the Commerce Department during the Trump administration, stated that they had been aware for some time that the export controls needed to be more secure. She added there were holes in the US export control that should be mended, and she said that was beyond the indictment of President Biden or Trump.

US To Impose Sanctions On Huawei & SMIC For 7nm Chip Manufacturing
US To Impose Sanctions On Huawei & SMIC For 7nm Chip Manufacturing
Source: Web

According to the letter, there are suspicions that the phone may have violated US export control regulations because of the wide use of US technology in the semiconductor supply chain worldwide. However, there is currently no concrete evidence that SMIC breached sanctions with the new chip. Experts in the field say that even though it would have been a challenging task for the two companies to avoid using any US technology. Currently, US officials have not confirmed whether they possess evidence that could implicate or ban SMIC. In a recent statement, the Commerce Department mentioned that they were still in the process of gathering more information on the alleged 7nm chip’s characteristics and composition.

Huawei & SMIC Cannot Produce This 7nm Chip Themselves

“Export controls are only one tool the US government uses to address national security threats presented by the PRC (People’s Republic Of China),” the statement says. Huawei, SMIC, and the US Commerce Department did not make immediate remarks on the House’s letter. According to Doug Fuller, a chip researcher at the Copenhagen Business School, there is almost zero percent possibility of SMIC efficiently producing a 7-nanometer chip on a large scale without using US equipment. However, it is feasible for them to make these chips in small volumes, but inefficiently and inaccurately.

Chris Miller, a professor at Tufts University and author of the book “Chip War,” believes that US tools were likely used, but he admits that he is not entirely sure of this conclusion. It is crucial to gather more information and thoroughly analyze the chip and Chinese companies’ eligibility to have solid evidence. The US included Huawei on the trade blacklist in 2019 and SMIC in 2020 for National security concerns. Since then, US suppliers had to acquire an essential license to supply goods to these Chinese tech organizations.