The price of the biggest manufacturer of contract chips in China fell on Thursday after two US legislators urged the White House to further limit export sales to the firm. The remarks were made following the launch of the Mate 60 Pro by Huawei Technologies, a Chinese smartphone with a cutting-edge chip that is thought to have been produced by SMIC.
The release last week surprised industry professionals who couldn’t comprehend how Shanghai-based SMIC would be able to produce such a chip in the wake of extensive US efforts to limit China’s access to foreign chip technology.
Soon after the debut, Canadian research firm TechInsights, which specializes in semiconductors, disclosed that the phone had a brand-new 5G Kirin 9000s processor that SMIC had created especially for Huawei.
What Happened With Huawei?
If these tiny chips can be made by China’s (US-banned) Semiconductor Manufacturing International Corp., as Vlad Savov and Debby Wu reported, the achievement may make US export bans on sophisticated semiconductors largely useless. Additionally, it’s hidden within a phone made by Huawei, which is also on the blacklist. Huawei is a Chinese business that in some ways served as the inspiration for US efforts to convince allies abroad to reject Chinese technology due to security concerns.
The government, according to US National Security Advisor Jake Sullivan, wants to know the precise makeup of the processor in Huawei’s Mate 60 Pro, which a teardown for Bloomberg News revealed was only a few years behind the current generation and was made by a company on the US government’s blacklist, Semiconductor Manufacturing International Corp.
After Huawei abruptly released its phone last week while Commerce Secretary Gina Raimondo was in China, Sullivan broke the hush in Washington. The disclosure was hailed as a breakthrough in attempts to lessen reliance on American technology by state-backed Chinese media on Wednesday. According to The Economic Daily, it personified “China Essence,” a play on the words “chip” and “heart.”
Existing Rules and Policies
According to current regulations, any business intending to provide Huawei with US technology, which is utilized throughout SMIC’s activities, must obtain Washington’s consent. Whether SMIC has a US license to supply Huawei is unknown.
The hardest aspect of the US strategy to defeat the second-largest economy in the world in this technology race, however, was always going to be enforcement. When a nation’s pride depends on succeeding, or at least catching up, even the tiniest accomplishment is significant.