Chinese companies are buying US chipmaking equipment to make advanced semiconductors, despite a raft of new export curbs aimed at thwarting advances in the country’s semiconductor industry, a report said on Tuesday.
The 741-page annual report, released by the US-China Economic and Security Review Commission, takes aim at the export curbs imposed in October last year by the administration of US President Joe Biden, which seek to bar Chinese chipmakers from getting US chipmaking tools if they would be used to manufacture advanced chips at the 14-nanometer node or below.
With the US Department of Commerce using the 14-nanometer restriction limit, “importers are often able to purchase the equipment if they claim it is being used on an older production line, and with limited capacity for end-use inspections, it is difficult to verify the equipment is not being used to produce more advanced chips,” the report said.
Photo: Reuters
The finding comes as the US scrambles to figure out how Chinese telecoms giant Huawei Technologies Co (華為) produced an advanced 7-nanometer chip to power its Mate 60 Pro smartphone at China’s top chipmaker, Semiconductor Manufacturing International Corp (SMIC, 中芯), despite the export curbs announced last year.
Huawei and SMIC were also added to a trade restriction list in 2019 and 2020, which in theory bars US suppliers from shipping some technology to the companies.
China watchers had theorized that SMIC could have made the chip with equipment obtained prior to last year’s rules, but it had other options for obtaining the equipment from overseas, the report said.
The US plugged a key loophole in its efforts to stymie China’s access to advanced chipmaking tools by convincing allies Japan and the Netherlands, with similarly robust chipmaking equipment industries, to announce their own restrictions on exports of the technology.
However, China stockpiled equipment by taking advantage of the lag between the US’ rules, and Japan and the Netherlands’ similar moves in July and September respectively, the report said.
In the first eight months of this year, China imported US$3.2 billion of semiconductor manufacturing machines from the Netherlands, a 96.1 percent increase over the US$1.7 billion in the same period last year, the report said.
China’s imports of semiconductor equipment from all countries totaled US$13.8 billion in the period, it said.
The report does not outline a specific recommendation to address the gaps in the US rules, but urges the US Congress to request an annual evaluation, to be completed within six months by the US General Accountability Office and later made public, of the effectiveness of export controls on chipmaking equipment to China.
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