U.S. Escalates Trade War, Orders Export Bans on Semiconductor Components to China’s SMIC

The U.S., taken aback by the latest smartphone from China’s Huawei, has tightened its grip on China’s SMIC (Semiconductor Manufacturing International Corporation), a supplier of semiconductors to Huawei. At the end of last year, it was belatedly revealed that the U.S. Department of Commerce had sent letters to dozens of U.S. parts suppliers, including the global semiconductor materials and process company Entegris, ordering them to halt exports to China.

According to Reuters on the 21st (local time), two sources said, “The U.S. Department of Commerce sent dozens of letters to U.S. suppliers late last year, ordering them to stop selling to SMIC’s latest factories.”

Another source said, “Many companies had already stopped selling to (the state-of-the-art factory) SMIC South, but this letter halted shipments of semiconductor manufacturing materials and parts from Entegris worth millions of dollars.”

Entegris also stopped shipping immediately upon receiving the U.S. Department of Commerce letter.

In the U.S., there have been calls, mainly from Republican hardliners, to prevent semiconductor technology from being leaked to SMIC and to stop it from producing advanced chips. It was a big event when Huawei regained the top spot in the Chinese smartphone market last year by launching the Mate 60 Pro 5G smartphone with advanced semiconductors made with a 7-nanometer process in August. Even Gina Raimondo, the U.S. Secretary of Commerce, said at a Senate Commerce Committee hearing in October last year that additional resources are needed to strengthen the enforcement of export controls for China, describing the situation as “incredibly shocking.”

Meanwhile, analyses indicate that China has found a breakthrough in semiconductor technology development despite U.S. sanctions. Despite restrictions on the export of advanced semiconductor manufacturing equipment to China, it has accelerated China’s semiconductor drive.

The Financial Times (FT) recently reported that SMIC succeeded in building a 5-nanometer dedicated production line with existing equipment that had been stockpiled before the U.S. semiconductor equipment export sanctions began. The so-called “Kirin chip,” designed by Huawei’s semiconductor design subsidiary HiSilicon, is installed in the latest version of Huawei’s premium smartphones. SMIC is also reportedly increasing its existing 7-nanometer production capability.