US administration and Congress ‘conflict’ over China’s 7-nanochip Huawei smartphone
As the commercialization of 7NADO chips in China's Huawei 5G mobile phones is revealed, the Republican-led U.S. Congress and the administration appear to be in conflict.
Republican Rep. Mike Gallagher, chairman of the House China Committee, has begun pressuring the Biden administration to take a tougher stance on sending American technology to China.
Representative Gallagher said in a statement on the 6th, "Because this chip could not have been produced without U.S. technology, SMIC may have violated the Commerce Department's Foreign Direct Product Rule," adding, "All U.S. technology exports to Huawei and SMIC must be restricted." “The time has come to stop and make it clear that companies that ignore American law and undermine our national security will be cut off from our technology.”
Regarding the U.S. trade control list of suppliers to Huawei and SMIC, Reuters previously reported that “despite the list, they received billions of dollars worth of licenses to sell American technology to the companies, with about 90% of the licenses “It is for sale to SMIC,” he said on the 7th.
Reuters said today that it had requested comment from the U.S. Department of Commerce, which oversees export controls, about Rep. Gallagher's statement, but "did not immediately respond."
Huawei was placed on a trade blacklist under the Trump administration in 2019 over U.S. national security concerns, forcing its U.S. suppliers and others to obtain special permission to ship products, and SMIC was added to the entity list in 2020.
Trade restrictions imposed on Huawei and SMIC by the U.S. administration include a foreign direct products rule that would ban any company around the world from using U.S. tools to manufacture chips for Huawei.
The Washington Post reported on the 4th, “Huawei’s latest smartphone used a 7-nanometer semiconductor developed by China itself,” and “The United States’ attempt to slow down China’s development in the artificial intelligence (AI) and big data fields through sanctions on advanced semiconductors.” is not being implemented, and concerns are growing that U.S. sanctions are useless in blocking China's advanced technological advancement.”
Reuters cited the Huawei mobile phone Mate 60 Pro ‘teardown report’ from analyst firm TechInsights on the 5th, saying, “It is powered by the new Kirin 9000s chip manufactured in China by SMIC (Semiconductor Manufacturing International Corp).” The report said, “ “It is the first to utilize SMIC’s most advanced 7nm technology and suggests that the Chinese government is making some progress in its attempts to build a domestic chip ecosystem.”
Bloomberg said on the 5th, “SMIC is using American technology throughout the process,” and “it is unclear whether it holds a U.S. license to supply this to Huawei.” Dan Hutchison, vice president of Tech Insights, told Reuters, “It is important.” “This is a huge challenge for countries that have tried to block China’s access to manufacturing technology, and the result could be stronger sanctions than we have now.”
Michael McCaul (Republican), Chairman of the US House of Representatives Foreign Affairs Committee, said on the 6th regarding Chinese foundry company SMIC's 7nm process semiconductor installed in Huawei's smartphones, "SMIC is working to secure American intellectual property," and added, "It violates US sanctions. “It seems clear that he did it,” he said, urging an investigation.
“It demonstrates the technological progress that China’s semiconductor industry has been able to make without EUV tools,” said TechInsight analyst Dan Hutcheson. “The difficulty of this achievement also demonstrates the resilience of the country’s chip technology capabilities,” he said. "It's a big geopolitical challenge for countries that want to do it, and the result could be even greater restrictions than exist today," he told Reuters.
EUV, the cutting-edge device at issue, refers to extreme ultraviolet lithography and is used to create advanced chips of 7nm or larger.
The launch of the Mate 60Pro, a high-end 5G phone that began selling to phone buyers in China, coincided with the visit of U.S. Secretary of Commerce Raimondo to China.
The phone's launch sent Chinese social media users and Chinese state media into a frenzy.
Jefferies analysts said Ottawa-based TechInsight's findings could trigger an investigation by the U.S. Department of Commerce's Bureau of Industry and Security, spark more debate in the U.S. about the effectiveness of sanctions and add to competition legislation that Congress is preparing on China. It could trigger the inclusion of harsher technology sanctions and "overall, it would lead to an escalation of the U.S.-China technology war," it said.
"Secretary of Commerce Raimondo came to China to cool things off, but these chips are being sold to the U.S. in development, saying, 'Look what we can do, we don't need you,'" TechInsight analyst Dan Hutcheson told Reuters. It’s a slap in the face,’” he said.
Huawei revealed a new $6 billion investment fund to bolster its chip sector under development by the government during Commerce Secretary Raimondo's visit to China last week, and unexpectedly unveiled its latest Mate 40 Pro smartphone, with US analysts predicting a 7-nanometer chip. Confirmed use.
SMIC previously manufactured 14nm as its most advanced chips, and in late 2020 the US Department of Commerce banned the purchase of EUV machines from Dutch company ASML.
TechInsight said, “SMIC believed it could produce 7nm chips by adapting simpler DUV machines that were freely available from ASML last year.”
Gavekal Dragonomics analyst Tilly Zhang downplayed the loopholes in new export controls for the Netherlands, citing lower yields in chip manufacturing that reduce the number of chips available on each wafer and increase costs, as well as restrictions on access to SMIC's more DUV machines. .
“They have shown that they are willing to accept costs that are much higher than what is generally considered to be worth,” he said of chip manufacturing. “Only a combination of Huawei’s enormous financial resources and generous government subsidies will allow the chips to be used for normal business.” “It allows us to sell our phones at market prices,” he told Reuters.
Reuters said, “Some research firms say SMIC's 7nm process has a yield of less than 50% compared to the industry standard of more than 70% and limits shipments to about 2-4 million units, which will not be enough for Huawei to regain its former smartphone market dominance. “It will be,” he predicted.
“(U.S.) controls impose high costs on the production of controlled technologies in China,” Doug Fuller, a chip researcher at Copenhagen Business School, told Reuters. revealed.