US says there is no proof that China can produce advanced chips on a large scale.
The United States has seen no evidence that Chinese manufacturer Huawei can make advanced smartphone chips “at scale,” Commerce Secretary Gina Raimondo told lawmakers on Sept. 19.
Huawei recently launched the Mate 60 Pro phone that some analysts described as a “milestone” for China, spotlighting a 7-nanometer chip built domestically by China’s top chipmaker, Semiconductor Manufacturing International Corp. Beijing has hailed the new device as Huawei’s “triumphant return” four years after the United States moved to cut off the firm’s access to essential chipmaking technologies.
Ms. Raimondo acknowledged that she was “upset” upon hearing about China’s technological breakthrough during her trip to the country last month.
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But the “good news” is, she said at a congressional hearing, “we don’t have any evidence that they can manufacture 7-nanometer [chips] at scale.”
“We’re trying to use every single tool at our disposal—BIS, enforcement, patents—to deny the Chinese an ability to, you know, get intellectual property to advance their technology in ways that can hurt us,” she said in the testimony, using the acronym for Bureau of Industry and Security, the agency under her department that regulates exports.
“Although I can’t talk about any investigations specifically, I promise you this: every time we find credible evidence that any company has gone around our export controls, we do investigate,” Ms. Raimondo said.
Tech Insights, a semiconductor-focused research firm that did a teardown analysis of the flagship Huawei phone, also found two components from SK Hynix, the world’s second-largest memory chip producer based in South Korea, prompting SK Hynix to open an investigation.
Being put on a U.S. trade blacklist in 2019, a curb that got expanded the following year, has bruised the business prospects of the Chinese tech giant, which in 2020 briefly surpassed Samsung as the world’s largest smartphone player. Amid sanctions and pandemic challenges, Huawei in March reported a nearly 70 percent decline in profit in 2022.
Ms. Raimondo’s remarks on Huawei chips met with an angry response from Beijing.
Mao Ning, the Chinese foreign ministry spokesperson, on Sept. 20 characterized the U.S. tech curbs as an “abuse of the concept of national security to hobble Chinese companies” and said it will steer China toward more self-reliance.
Ms. Raimondo gave her testimony at a House hearing to review the implementation of the CHIPS and Science Act a year after its passage. The bill directed tens of billions of dollars to developing semiconductors at home.
Ramping up domestic chip manufacturing is key to keeping the United States’ leading spot in the technological race, Ms. Raimondo said.
“I know that we are vulnerable; we buy all of those chips you’re talking about, the AI chips, the leading edge chips, all of that. None of them are made in America right now,” she said at one point, adding that she aims to “bring that manufacturing home … as fast as we can.”
“There’s no shortcut around that because we need them at scale. AI consumes massive numbers of chips,” she said.
‘Out-Innovate’ China
Compared to China, U.S. investment in the field is “much lower,” Ms. Raimondo said, pointing to reports of Beijing setting as much as $145 billion state subsidy for the semiconductor industry last year, with another package of around $40 billion to come.
“We’re not a state-run economy, nor do we want to be one,” she said. “We’re not going to go toe-to-toe with them for public money; we’re going to out-innovate them and draw in private sector capital.”
While in China, Ms. Raimondo has rejected Beijing’s request to ease export controls on technology that has military potential, stating that “we don’t negotiate on matters of national security.”
“We’re going to continue to vigorously control U.S technology so they cannot get this technology for their military,” she said at the hearing.
On Sept. 22, the Commerce Department released the final national security guardrails of the CHIPS and Science Act. The rules classify semiconductors as “critical to national security” and restrict expansion of advanced chip foundries in “foreign countries of concern” for 10 years after receiving CHIPS money.
Ms. Raimondo on Tuesday noted that her department has added over 700 Chinese entities to the sanction list.
“Increasingly,” the commerce secretary said, “national security is about technology and keeping our edge over China, staying ahead of them.”
As long as the regime continues with its military-civil fusion strategy—leveraging civilian innovation for defense use, “we’re going to have to be tougher than ever to control that technology from getting into the hands of their military,” Ms. Raimondo said.
“It’s not that we want to hold back their economy per se, but we do want to hold back their military.”
Majority of its semiconductor chips, posing a national security risk. She expressed concerns over relying on foreign suppliers, especially those from China, due to the threat of unauthorized access to advanced technologies and intellectual property theft.
Eld of chip manufacturing has fallen behind in recent years, giving China an edge in the race for technological dominance. However, Commerce Secretary Gina Raimondo emphasized the importance of ramping up domestic chip manufacturing to maintain the United States’ leading position in the technology sector.
During a congressional hearing on September 19, Raimondo stated that the United States has not seen any evidence that Huawei, a Chinese smartphone manufacturer, can produce advanced 7-nanometer chips at a large scale. This statement came after Huawei launched its Mate 60 Pro phone, which featured a domestically-built 7-nanometer chip by China’s top chipmaker, Semiconductor Manufacturing International Corp.
Raimondo expressed her frustration upon hearing about China’s technological breakthrough during her recent trip to the country. She highlighted the efforts being made by the United States to restrict China’s access to intellectual property and advanced chipmaking technologies through export controls, enforcement, and patents.
Although she could not discuss specific investigations, Raimondo assured lawmakers that the United States investigates any credible evidence of companies circumventing export controls. This reinforces the commitment of the Bureau of Industry and Security (BIS), the agency under Raimondo’s department responsible for regulating exports, to protect national security and prevent any harm caused by unauthorized access to advanced technologies.
In addition to concerns over Huawei’s chip manufacturing capabilities, Tech Insights, a semiconductor-focused research firm, discovered components from SK Hynix, a South Korean memory chip producer, in the flagship Huawei phone. This prompted SK Hynix to launch an investigation.
Being placed on the U.S. trade blacklist in 2019 and facing subsequent curbs has significantly impacted Huawei’s business prospects. Despite briefly surpassing Samsung as the world’s largest smartphone player in 2020, Huawei reported a nearly 70 percent decline in profit in 2022 amidst sanctions and pandemic challenges.
Raimondo’s comments on Huawei chips received an angry response from Beijing. Mao Ning, the Chinese foreign ministry spokesperson, criticized the U.S. tech curbs as an abuse of the concept of national security and viewed them as a motivation for China to enhance self-reliance.
Raimondo gave her testimony at a House hearing to review the implementation of the CHIPS and Science Act, which directs significant funding towards developing semiconductors domestically. She emphasized the need to bring chip manufacturing back to the United States as fast as possible to address the vulnerabilities caused by reliance on foreign suppliers.
Raimondo acknowledged that the United States currently imports the
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