SMIC ‘May Have Violated’ US Law In Producing Advanced Chip

China’s biggest chipmaker SMIC may have violated US laws in manufacturing its high-end 7 nanometre chip for Huawei, a senior US Commerce Department official has told a congressional hearing.

Alan Estevez, who oversees export policy, said in response to a question by Representative Michael McCaul over whether SMIC broke US export rules in producing the chip: “Potentially, yes. We will have to assess.”

Esteves heads the Bureau of Industry and Security, which is responsible for chip export controls and sanctions.

The Joe Biden administration has brought in two rounds of export controls prohibiting the sale of high-end US chipmaking equipment to Chinese firms, and has persuaded allies such as Japan and the Netherlands to introduce similar controls.

Investigation

Huawei and SMIC are also both sanctioned under the US Entity List, Huawei since 2019 and SMIC since 2020.

Nevertheless Huawei last year introduced its Mate 60 Pro smartphone using SMIC’s 7nm chip, the most advanced processor made in China to date.

The handset was launched during a visit to China by US Commerce Secretary Gina Raimondo last August as a symbol of China’s ability to continue to produce high-end technology in spite of sanctions.

SMIC reportedly used equipment from US and Dutch firms which are now covered by export controls but which were not at the time.

The chipmaking firm has been using older technology to produce the advanced chips, resulting in a lower yield, according to experts.

More sanctions

“They did access tools before we put in our tool controls – not the highest-end tools, but the level just below that,” Estevez told the hearing.

“Those tools will ossify over time and that process will be degraded,” he said.

The BIS said last September that it was probing the “purported” 7nm chip and has reportedly clamped down on the supply of more US parts and technology to SMIC.