In a resounding call to action, Representative Mike Gallagher, the influential chair of the House of Representatives’ committee on China, has urged the U.S. Commerce Department to halt all technology exports to Huawei and China’s prominent semiconductor company. This appeal follows the revelation of new chips in Huawei smartphones that may contravene trade restrictions, raising concerns about national security.
The recent release of the Mate 60 Pro by the Chinese electronics titan, Huawei, has intensified the scrutiny. Analysts believe that this phone incorporates a chip possibly developed using a groundbreaking technology attributed to Semiconductor International Manufacturing Corp (SMIC).
Representative Gallagher issued a statement, expressing his apprehension: “This chip likely could not be produced without U.S. technology and thus SMIC may have violated the Department of Commerce’s Foreign Direct Product Rule. The time has come to end all U.S. technology exports to both Huawei and SMIC to make clear any firm that flouts U.S. law and undermines our national security will be cut off from our technology.”
The Huawei saga began in May 2019 when the company was placed on a trade blacklist, primarily due to national security concerns. This move mandated that U.S. suppliers and other entities obtain special licenses to engage in the export of goods to Huawei. Subsequently, in December 2020, SMIC found itself added to the so-called entity list out of fears that it might divert advanced technology for military purposes.
The trade restrictions imposed on both Huawei and SMIC include the Foreign Direct Product Rule, designed to prevent any company worldwide from employing tools originating in the United States to manufacture chips for Huawei.
However, a perplexing revelation emerged as suppliers to Huawei and SMIC secured billions of dollars’ worth of licenses to facilitate the sale of U.S. technology to these companies, despite their presence on the trade lists. It’s noteworthy that approximately 90% of these licenses pertained to sales to SMIC, underscoring the complexity of the situation.
As of now, the U.S. Commerce Department’s bureau responsible for export controls has not provided an immediate response to inquiries.
This development underscores the ongoing tension surrounding technology exports, national security concerns, and the evolving dynamics of the global semiconductor industry. The fate of these export restrictions lies at the nexus of economic interests and geopolitical considerations, echoing far beyond the confines of trade policy.
