Calls to Halt Tech Exports to Huawei and SMIC Following Chip Discovery

The Chair of the House of Representatives' committee on China, Representative Mike Gallagher, has called for a complete halt to technology exports to Huawei Technologies and China's leading semiconductor firm. This demand comes in light of recent discoveries of new chips in Huawei phones that may violate trade restrictions. Gallagher, an influential Republican lawmaker, has been pressing the Biden administration to take a tougher stance on sending US technology to China.

Huawei, the Chinese electronics giant, recently introduced the Mate 60 Pro, a smartphone that has drawn attention due to the chip it contains. Analysts believe that this chip may have been produced with the assistance of Semiconductor International Manufacturing Corp (SMIC), raising concerns about potential trade rule violations.

Gallagher emphasized the significance of this discovery, stating, "This chip likely could not be produced without US technology, and thus SMIC may have violated the Department of Commerce's Foreign Direct Product Rule." He further asserted, "The time has come to end all US technology exports to both Huawei and SMIC to make clear any firm that flouts US law and undermines our national security will be cut off from our technology."

Huawei has been on a trade blacklist since May 2019 due to national security concerns, which necessitates special licenses for its US suppliers and others to ship goods to the company. SMIC, on the other hand, was added to the entity list in December 2020 over fears that it could divert advanced technology to military users.

Trade restrictions imposed on Huawei and SMIC include the Foreign Direct Product Rule, designed to prevent any company worldwide from using tools from the United States to manufacture chips for Huawei. However, previous reports have indicated that suppliers to both Huawei and SMIC have received billions of dollars' worth of licenses to sell US technology to these companies, despite their presence on trade lists. Notably, approximately 90% of these licenses were for sales to SMIC.

As of now, the US Commerce Department's bureau overseeing export controls has not provided an immediate response to requests for comment on the situation. The issue underscores the ongoing tensions surrounding technology exports and trade relations between the United States and China.

By fLEXI tEAM