Chinese Firms Secure US Equipment for Manufacturing Advanced Chips Despite Export Curbs: Congressional Report
Earlier this week, the US House of Representatives’ bipartisan select committee on China released a detailed report that sheds light on Chinese companies’ aggressive acquisition of US chipmaking equipment. The report, which spans a whopping 741 pages, highlighted the Chinese companies’ actions in obtaining US equipment to produce advanced semiconductors, all while violating new US export restrictions intended to slow down China’s semiconductor industry.
The new restrictions, imposed by the Joe Biden administration in October 2022, have aimed to limit exports of 14-nanometer or below semiconductor chipmaking equipment to China. Unfortunately, the restriction has caused complications, with importers declaring that the equipment is meant for older production lines, thus creating a loophole that makes it challenging for authorities to confirm the actual use of the equipment.
US authorities are reportedly struggling to enforce the restrictions, as evidenced by the case of Huawei, a major Chinese telecom company. According to Reuters, a source revealed that the US government is facing difficulty in preventing Huawei from having its advanced 7-nanometer chip manufactured at SMIC, China’s top chipmaker. This was further complicated by the fact that Huawei and SMIC managed to circumvent previous trade restrictions, raising doubts about the effectiveness of US export laws.
Allies Japan and the Netherlands, with strong sectors producing chipmaking equipment, have been mobilized by the United States to impose their own export restrictions on the vital technology, limiting China’s access to sophisticated chipmaking gear. However, China took advantage of the time between the US laws in October 2022 and similar steps by Japan and the Netherlands in July and September 2023 to stockpile equipment.
The report also revealed that China’s imports of chip-manufacturing machinery from the Netherlands saw a staggering 96.1% increase between January and August of 2023, reaching a total of $3.2 billion compared to 2022. This indicates that China has been actively securing semiconductor equipment despite the US limitations.
Despite these findings, the Congressional report does not offer solutions to the shortcomings in US law. Instead, it calls for a yearly review of the General Accountability Office’s assessment of the efficacy of export restrictions on chip-making machinery to China. In the meantime, the Biden administration has expressed its intention to discontinue the export of cutting-edge AI chips and chip-making equipment, such as those produced by Nvidia, to China to curb the country’s gains in AI and military technologies.
In conclusion, the US faces ongoing challenges in restricting China’s access to advanced chipmaking equipment. The nature of these difficulties and the effectiveness of US export laws remain topics of concern, particularly in light of the Chinese companies’ continued acquisition of US equipment for manufacturing advanced chips despite export restrictions.
I have over 10 years of experience in the cryptocurrency industry and I have been on the list of the top authors on LinkedIn for the past 5 years. I have a wealth of knowledge to share with my readers, and my goal is to help them navigate the ever-changing world of cryptocurrencies.
