China receives US equipment to make advanced chips despite new rules

WASHINGTON: Chinese companies are buying up US chipmaking equipment to make advanced semiconductors, despite a raft of new export curbs aimed at thwarting advances in the country’s semiconductor industry, a congressional report said on Tuesday.

The 741 page annual report, released by the House of Representative’s bipartisan select committee on China, takes aim at the Biden administration’s Oct. 2022 export curbs, which seek to bar Chinese chipmakers from getting US chipmaking tools if they would be used to manufacture advanced chips at the 14 nanometer node or below.

With the Commerce Department using the 14 nanometer restriction limit, “importers are often able to purchase the equipment if they claim it is being used on an older production line, and with limited capacity for end-use inspections, it is difficult to verify the equipment is not being used to produce more advanced chips,” the report stated.

The finding comes as the United States scrambles to figure out how Chinese telecoms giant Huawei was able to produce an advanced 7 nanometer chip to power its Mate 60 Pro smartphone at China’s top chipmaker SMIC, despite the export curbs announced last year.

Huawei and SMIC were also added to a trade restriction list in 2019 and 2020, which in theory bars US suppliers from shipping certain technology to the companies.