Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯) “potentially” broke US law if it manufactured a processor for sanctioned telecom giant Huawei Technologies Co (華為), a senior US official said on Thursday.
US Undersecretary of Commerce for Industry and Security Alan Estevez was questioned about the 7-nanometer processor that SMIC made for Huawei during testimony before US lawmakers. When asked by US House of Representatives Foreign Affairs Committee Chairman Michael McCaul whether SMIC violated US controls, Estevez said “potentially, yes.”
The Chinese chipmaker’s shares slid as much as 5.5 percent in Hong Kong, its biggest intraday drop in about a month.
Photo: AFP
“We’ll assume that it was SMIC,” Estevez said. “I can’t talk about any investigations that may or may not be going, but we certainly share those concerns, and that’s certainly the reporting.”
Estevez described SMIC’s manufacturing process as “low-yield,” repeating past comments from commerce officials questioning China’s ability to produce advanced chips at scale and at a consistent performance threshold.
Estevez heads the agency’s Bureau of Industry and Security, which is responsible for chip export controls and sanctions that the administration if US President Joe Biden hopes will kneecap China’s semiconductor ambitions. Biden has introduced sweeping restrictions on the ability of Chinese companies to purchase advanced chips and chipmaking gear from US firms, and persuaded key allies including the Netherlands and Japan to introduce their own curbs.
Despite those efforts, Shenzhen, China-based Huawei managed to debut an advanced 7-nanometer chip in a smartphone that went on sale while US Secretary of Commerce Gina Raimondo was visiting China in August last year. The chip in Huawei’s Mate 60 device was manufactured by SMIC but relied heavily on technology from Dutch equipment giant ASML Holding NV and US gear makers including Lam Research Corp and Applied Materials Inc.
That equipment was exported to China before US and Dutch curbs limiting such transactions went into effect, Bloomberg News has reported.
“They did access tools before we put in our tool controls — not the highest-end tools, but the level just below that,” Estevez said. “Those tools will ossify over time and that process will be degraded.”
The US Bureau of Industry and Security in September last year said that it is probing the “purported” 7-nanometer chip, and Raimondo has vowed the “strongest possible” action to protect US national security.
The Biden administration is considering sanctioning Huawei’s secretive network of potential chipmaking partners, as well as a couple of firms officials say could purchase restricted equipment and sell it to the telecom giant.
US officials are also pushing their Dutch and Japanese counterparts to tighten their chip controls — and trying to persuade Germany and South Korea to join the arrangement, particularly to stem the flow of spare parts from those countries to China.
HANDOVER POLICY: Approving the probe means that the new US administration of Donald Trump is likely to have the option to impose trade restrictions on China US President Joe Biden’s administration is set to initiate a trade investigation into Chinese semiconductors in the coming days as part of a push to reduce reliance on a technology that US officials believe poses national security risks. The probe could result in tariffs or other measures to restrict imports on older-model semiconductors and the products containing them, including medical devices, vehicles, smartphones and weaponry, people familiar with the matter said. The investigation examining so-called foundational chips could take months to conclude, meaning that any reaction to the findings would be left to the discretion of US president-elect Donald Trump’s incoming team. Biden
INVESTMENT: Jun Seki, chief strategy officer for Hon Hai’s EV arm, and his team are currently in talks in France with Renault, Nissan’s 36 percent shareholder Hon Hai Precision Industry Co (鴻海精密), the iPhone maker known as Foxconn Technology Group (富士康科技集團) internationally, is in talks with Nissan Motor Co’s biggest shareholder Renault SA about its willingness to sell its shares in the Japanese automaker, the Central News Agency (CNA) said, citing people it did not identify. Nissan and fellow Japanese automaker, Honda Motor Co, are exploring a merger that would create a rival to Toyota Motor Corp in Japan and better position the combined company to face competitive challenges around the world, people familiar with the matter said on Wednesday. However, one potential spanner in the works is
HON HAI LURKS: The ‘Nikkei’ reported that Foxconn’s interest in Nissan accelerated the Honda-merger effort out of fears it might be taken over by the Taiwanese firm Nissan Motor Co has become the latest buyout target in Japan as it explores a merger with Honda Motor Co and faces an overture from Hon Hai Precision Industry Co (鴻海精密), known as Foxconn Technology Group (富士康科技集團) internationally. Shares in Nissan yesterday jumped 24 percent, the most on record, to hit the daily limit, after the two Japanese automakers acknowledged that talks are ongoing to better position themselves for competitive challenges during a time of upheaval in the global auto industry. Foxconn — a Taipei-based manufacturer of iPhones, which has been investing heavily in factories to build electric vehicles — has also
CHIP SUBSIDY: The US funding would help alleviate the financial pressure from building two fabs in the US and should lift gross margins in 2026, the company said GlobalWafers Co (環球晶圓), the world’s third-largest silicon wafer supplier, yesterday said it is to receive US$406 million in subsidies from the US Department of Commerce for two new US fabs under the CHIPS and Science Act, with the first batch of the funds likely coming next year. The grant represents 10 percent of the planned investments of US$4 billion in advanced semiconductor wafer manufacturing facilities in Texas and Missouri, GlobalWafers said. The commerce department is to disburse the funds based on the completion of project milestones over a multiyear timeframe, the company said. Along with the tax credit, which is equal to
RSS