US Congressmen demanded a deal with SMIC to supply 7nm chips for Huawei while avoiding sanctions

American Congressmen allegedly China’s largest chip maker Semiconductor Manufacturing International Corp. (SMIC) in violation of US sanctions against Huawei. This came after the release of the Huawei Mate 60 Pro smartphone, which revealed a 7nm processor, most likely made by SMIC.

Image source: GSMArena.com

Michael McCaul, Chairman of the Foreign Affairs Committee of the US House of Representatives, who is currently in the Netherlands on an official visit, told a briefing at the US Embassy in The Hague that it was necessary to stop the supply of SMIC chips to investigate Huawei as it appears to have violated sanctions. Following the announcement, Hong Kong’s SMIC shares fell 7.4%, the sharpest drop in more than three months. The company’s shares fell 8.6% on the Shanghai Stock Exchange.

In turn, Rep. Mike Gallagher, chairman of the House Select Committee on Competition with China, suggested that the US should generally halt all exports of American technology to both Huawei and SMIC — even if it’s legacy technology that isn’t under this control fall under the current export restrictions.

“This chip most likely could not have been made without American technology, and as such SMIC may have violated the Department of Commerce’s Foreign Direct Product Rules (FDP).” — specified Gallagher in his statement. — It is time to halt all exports of American technology for both Huawei and SMIC, making it clear that any company that violates US law and undermines our national security will be cut off from our technology.”.

McCall said that the US Department of Commerce’s Bureau of Industry and Security (BIS), which deals with national security and high-technology issues, is too lenient towards Chinese companies, as evidenced by the fact that American companies are licensed to sell technology to Chinese ones Company up $23 billion in the first quarter of last year. Note that previous US Republican Party officials have suggested transferring responsibility for export controls to the Pentagon, which would address this issue more aggressively.