The US Department of Commerce last week ordered multiple chip equipment companies to halt shipments of certain tools to China’s second-largest chipmaker, Hua Hong Semiconductor Ltd (華虹半導體), its latest action to slow the country’s development of advanced chips, two people familiar with the matter said.
The department sent letters to at least a handful of companies informing them of restrictions on tools and other materials destined for two Hua Hong facilities US officials believe make China’s most sophisticated chips, the people said.
Top US chip equipment companies Lam Research Corp, Applied Materials Inc and KLA Corp, each of which has significant business supplying China, were among those believed to have received a letter, the sources added.
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China hopes the US would take concrete actions to maintain the stability and smooth functioning of global industrial and supply chains, Chinese Ministry of Foreign Affairs spokesperson Lin Jian (林劍) said yesterday at a daily news conference.
Reuters exclusively reported last month that Hua Hong group had developed advanced chip manufacturing technologies that could be used to produce artificial intelligence (AI) chips, a milestone in Beijing’s efforts to boost tech self-sufficiency.
The group’s contract chipmaking business, Huali Microelectronics Corp (華力微電子), was preparing a 7-nanometer chipmaking process at its Shanghai plant, sources said.
Semiconductor Manufacturing International Corp (SMIC, 中芯), China’s largest contract chipmaker, is the only domestic company that can make chips with 7-nanometer technologies so far, the report said.
The letters from the department also aim to prevent shipments to Huali, sources said.
“This is an overdue and welcome first step from the [US President Donald] Trump administration,” Council on Foreign Relations senior fellow for China and emerging technologies Chris McGuire said.
“But to have any effect, it must capture all shipments from US toolmakers, including from their overseas subsidiaries,” McGuire said.
It can be hard to pinpoint which factories produce advanced chips.
The two Hua Hong facilities targeted by the US Department of Commerce are Fab 6, which the Huali Microelectronics’ Web site says has 28/22-nanometer technology and is in Shanghai; and 8a, which does not appear on its Web site. Sources said it is believed to be under construction.
China’s tech giant Huawei Technologies Co (華為), which is on a US trade blacklist, has been collaborating with Hua Hong and is planning to move part of its AI chip production from SMIC to Hua Hong, other sources said.
Huali’s research and development of 7-nanometer chips at its Hua Hong Fab 6 site began last year with support from Huawei-backed SiCarrier, Reuters reported last month.
Huali is planning an initial production capacity of a few thousand 7-nanometer wafers a month by the end of this year.
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