The primary objective is to impose sanctions against China for developing a world-class chip ecosystem that could positively impact its military.
In a further effort to shatter China’s dream of spearheading the global semiconductor value chain, Chairman John Moolenaar and Ranking Member Raja Krishnamoorthi of the Select Committee on the Chinese Communist Party (SCCCP) have requested Gina Raimondo, the U.S. Secretary of Commerce, to undertake stern action against China-based Huawei’s increasing development of chip fabrication units.
As per media reports, the Biden administration has been pressed to sanction Huawei’s suppliers from purchasing any U.S.-manufactured chip-making gear. Bloomberg reported that Pengxinxu, SwaySure Technology, Qingdao Si’En and several others are likely members of Huawei’s illegal network. The Select Committee notified that Huawei has been trying to hide its association with these illicit practices for a long time to outwit the existing U.S. sanctions on Chinese companies.
Citing national security and efforts to boost self-reliance in semiconductor manufacturing, the U.S., under the leadership of Donald Trump in 2019, blocked Huawei, which was then extended until 2021. However, Joe Biden did not change the decision. The company has become a pariah not only in the U.S. but also in several European countries, which banned the use of Huawei’s equipment in their 5G networks.
Applied Materials Inc., Lam Research Corp., and KLA Corp., as well as Dutch lithography system maker ASML Holding NV and Japanese toolmaker Tokyo Electron Ltd, have also barred the sales of cutting-edge chips and equipment to China. India, on the other hand, has also devised the China Plus One strategy with the onset of COVID-19.
The lawmakers stated that as most of these units rely entirely on the U.S.-produced semiconductor manufacturing equipment (SME), it is easier and a growing opportunity for the country to put a brake on Huawei’s mounting aspirations. The primary objective is to impose sanctions against China for developing a world-class chip ecosystem that could positively impact its military. According to the experts, the U.S. is mainly focused on Huawei because amid harsh restrictions, it unleashed a very powerful smartphone powered by a top-notch 7-nanometer chip from SMIC.
Since then, licenses have been revoked by the Commerce Department, which permits the sale of chips to Huawei and its suppliers. The recent proposals have added 120 more firms to the entry list and imposed new restrictions on-chip and equipment sales to China. This has set an alarming bell for the chip equipment maker companies. For ASML, China will account for 20 percent of revenue in the coming financial year.
