Sat, Sep 09, 2023 page12

• US probes chip made in China as tensions flare

  SECURITY REASSESSING: The US probe into Huawei has sparked a debate as to whether US export controls of key materials, tools and knowhow need tightening

  • Bloomberg
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  The US government has begun an official probe into an advanced made-in-China chip housed within Huawei Technologies Co’s (華為) latest smartphone, a revelation that has set off a debate in Washington about the efficacy of sanctions intended to contain a geopolitical rival.

  The US Department of Commerce, which has enacted a series of restrictions against Huawei and China’s chip industry over the past two years, said it is investigating into the “purported” 7-nanometer processor discovered within the Mate 60 Pro. The chip was made by China’s Semiconductor Manufacturing International Corp (SMIC, 中芯), which like Huawei is blacklisted by the US and restricted from accessing US technology.

  Huawei’s quiet reveal of a mobile phone-utilizing technology the US has sought to keep out of Beijing’s hands threatens to derail recent efforts of outreach by the administration of US President Joe Biden. The phone went on sale online while US Secretary of Commerce Gina Raimondo was on a trip to China last week, the latest in a series of high-level diplomatic visits to Beijing.

  

  A visitor checks a mobile phone near the Huawei logo during the Mobile World Congress in Shanghai, China June 28, 2023.

  Photo: Reuters

  The debate now centers around whether it represents a failure of US efforts — led by Raimondo’s department — to hamstring China’s tech sector, which Washington fears would give its rival a military edge. It raised questions about whether the main US mechanisms to do that — controls on exports of key materials, tools and knowhow — need to be tightened.

  Chinese semiconductor equipment makers soared 20 percent after news of the US probe spurred bets that the sector would gain increased state support. That advance was mostly led by companies related to lithography gear — a weak link in China’s chip supply chain, and one Beijing would like to develop. Shanghai Electric Group Co (上海電氣), whose controlling shareholder has a major stake in lithography specialist Shanghai Micro Electronics Equipment Group Co (上海微電子), rose by its 10 percent limit.

  “We are working to obtain more information on the character and composition of the purported 7-nanometer chip,” a US Commerce spokesperson said in a statement. “To be clear: Export controls are just one tool in the US government’s toolbox to address the national security threats presented by the People’s Republic of China [PRC]. The restrictions in place since 2019 have knocked Huawei down and forced it to reinvent itself — at a substantial cost to the PRC government.”

  The Mate 60 Pro smartphone employs an unusually high proportion of Chinese parts, in addition to its main processor, an ongoing analysis by TechInsights conducted for Bloomberg revealed, a sign of the country’s progress in developing domestic tech capabilities.

  US National Security Advisor Jake Sullivan has said he would withhold comment until the US obtained more information.

  “There’s a number of different methods to try to sort of come to an understanding of what exactly it is that we’re dealing with here,” Sullivan told reporters aboard Air Force One on Thursday. “I can’t give you an exact number of days but this is not going to be months down the road. We’re going to want to look at this carefully, consult with our partners, get a clearer sense of what we’re looking at, and then we’ll make decisions accordingly.
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