Following allegations of breaking sanction rules, the United States has recently taken decisive action against Semiconductor Manufacturing International Corp (SMIC), China's leading chipmaker.
The crackdown comes after SMIC produced a sophisticated chip for Huawei's Mate 60 Pro smartphone, which has raised eyebrows and concerns in Washington (via Reuters).
BEIJING, CHINA - DECEMBER 05: U.S Vice President Joe Biden speaks at a business leader breakfast at the The St. Regis Beijing hotel on December 5, 2013 in Beijing, China. U.S Vice President Joe Biden is on an official visit to China from December 4 to 5.
Controversial Huawei Mate 60 Pro Chip
Huawei, based in Shenzhen, was once a global leader in smartphone technology, but has suffered significant setbacks as a result of US trade sanctions. However, thanks to the success of its Mate 60 Pro 5G smartphone, Huawei has recently regained its throne in China's smartphone market.
The Huawei Mate 60 Pro, which was unveiled amid US sanctions against China and Huawei, has attracted attention for its advanced technology, particularly its chipset.
According to reports, SMIC's involvement in the production of a 5nm chipset for the Mate 60 Pro has prompted US officials to take action, with plans to restrict SMIC's access to American imports, including critical chipmaking materials and components.
According to sources familiar with the situation, the US Commerce Department has sent numerous letters to American suppliers of SMIC, suspending permission to sell to the company's most advanced plant.
This action has halted shipments worth millions of dollars, affecting companies such as Entegris, a major supplier to the chipmaking industry. Despite claims of compliance with export regulations, Entegris is caught in the crossfire of US-China tensions, resulting in disruptions in sales to China.
While SMIC has yet to respond to requests for comment, a spokesperson for the Chinese embassy in Washington has condemned the US actions as "economic bullying."
Read Also: Teardown Reveals Huawei's Latest Laptop Comes with 5-nm TSMC Chip, Defying China's Tech Sanctions
Crackdown on US Tech
The crackdown on SMIC coincides with the Biden administration's broader efforts to halt the flow of US technology to Chinese companies, particularly those with alleged ties to China's military-industrial complex.
Critics of the US government's approach say the measures against SMIC and Huawei are insufficient. Republican Congressman Michael McCaul has chastised the Commerce Department for what he sees as laxity in addressing national security concerns.
The Trump administration had previously imposed restrictions on Huawei and SMIC, citing sanctions violations and ties to the Chinese military. While some shipments were permitted under certain conditions, the Biden administration has taken steps to further limit Chinese firms' access to US technology.
The consequences of the crackdown on SMIC go beyond bilateral tensions between the United States and China. With China accounting for a sizable portion of its sales, companies like Entegris face difficulties in navigating the changing regulatory landscape.
The disruption in the semiconductor supply chain could have an impact on global tech markets, potentially affecting production timelines and product availability.
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