US needs to crack down on Chinese chipmaker SMIC, Republican lawmaker says By Reuters

By Karen Freifeld

(Reuters) – A prime Republican lawmaker has accused the Biden administration of not doing sufficient to forestall China’s Semiconductor Manufacturing Worldwide Corp (SMIC) from strengthening the nation’s chipmaking business and military-industrial advanced.

Michael McCaul, chair of the Home Overseas Affairs Committee, urged U.S. Commerce Division brokers to go to SMIC’s services and verify whether or not the corporate is illegally producing chips for Huawei, the sanctioned telecommunications firm seen as a nationwide champion inside China’s chip business.

In a Nov. 4 letter seen by Reuters, McCaul described what he referred to as “rising bipartisan frustration” that the Commerce Division’s Bureau of Trade and Safety (BIS) had not acted on reviews of Huawei’s efforts to evade U.S. export controls.

“There’s rising proof that SMIC is violating U.S. export management legal guidelines,” McCaul wrote to BIS beneath secretary Alan Estevez. If China is just not prepared to instantly comply with a “complete audit of all SMIC services and its books,” McCaul stated, “BIS ought to pause all current licenses for SMIC.”

McCaul stated SMIC’s breakthroughs – together with its superior chip in a Huawei smartphone, and anticipated manufacturing of over one million AI processors for Huawei – are a “smoking gun” for a violation and will assist China surpass the U.S. in synthetic intelligence.

The Commerce Division stated it had obtained McCaul’s letter and would reply via “applicable channels.” Final week, in response to related criticism, it stated that no Commerce Division had been more durable on China.

SMIC didn’t instantly reply to requests for remark, nor did Huawei.

The Chinese language embassy in Washington stated in an announcement that “sure U.S. politicians” have been “overstretching the idea of nationwide safety” and politicizing “science and know-how and financial and commerce points.”

SMIC was added to the Commerce Division’s restricted commerce record in 2020 for alleged ties to the Chinese language army industrial advanced. A 12 months earlier, Huawei was positioned on the record after alleged sanctions violations. Each firms have beforehand denied wrongdoing.

Being on the “Entity Listing,” because it’s referred to as, normally bars U.S. shipments to focused companies. However when the Trump administration added Huawei and SMIC, their guidelines allowed exporters to get licenses to ship billions of {dollars} in U.S. items and know-how to them.