Huawei is dodging advanced chip sanctions through suppliers, claims US Select Committee

1 week ago 5

Despite the US’s best efforts to sanction chip exports to Chinese companies, Huawei is reportedly still accessing components through strategic partnerships.

Companies like Pengzinzu, SwaySure Technology, Qingdao Si’En and “potentially many others” are suspected of being part of a “clandestine network” of organizations supporting Huawei to maintain its access to restricted chips (via SCMP).

The concerns were raised by House China Select Committee Chairman John Moolenaar and Ranking Member Raja Krishnamoorthi in a recent letter addressed to Commerce Secretary Gina Raimondo.

Huawei is reportedly circumventing US chip sanctions

The US and many of its allies have already imposed significant restrictions on the sale of advanced chips and manufacturing equipment to China, including companies like Applied Materials and ASML Holding, however they have proven broadly unsuccessful.

The efforts, hoped to stifle China’s development of advanced semiconductors, which the US believes could benefit the nation’s military, have been hard to regulate. Chinese firms were previously observed accessing Nvidia’s A100 and H100 chips via cloud computing services such as AWS.

Huawei’s latest smartphone, powered by a seven-nanometer chip from Semiconductor Manufacturing International Corp (SMIC), represents a major advancement, triggering calls for stricter controls.

“We must continue in our efforts to deny Huawei, and similar firms, the ability to access US technology," wrote Moolenaar and Krishnamoorthi.

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Concerns have also been raised about delayed processes, which have allowed Chinese companies to stockpile advanced equipment.

On the other side, companies are worried export sanctions might significantly impact business. ASML says that China accounts for around one-fifth of its revenue (via Bloomberg).

Moreover, Chinese Foreign Ministry spokeswoman Mao Ning described the US as “overstretching the concept of national security, setting barriers and undermining normal cooperation between the two countries” at a Beijing press briefing.

The Commerce Department has acknowledged receipt of the letter and indicated that it would respond through the appropriate channels.