US Lawmaker Raises Concerns over SMIC’s Role in China’s Chipmaking

US Lawmaker Raises Concerns over SMIC’s Role in China’s Chipmaking

Representative Michael McCaul, chair of the House Foreign Affairs Committee, has expressed concerns about the Biden administration’s efforts to curb China’s semiconductor industry. In a letter to the Commerce Department, McCaul accused SMIC, a Chinese chipmaker, of potentially violating U.S. export controls and bolstering China’s military-industrial complex.

SMIC’s Alleged Involvement with Huawei

McCaul highlighted reports suggesting that SMIC may be illegally producing chips for Huawei, a Chinese telecommunications giant sanctioned by the U.S. He cited SMIC’s advanced chip in a Huawei smartphone and plans to produce AI processors for Huawei as evidence of potential violations.

Growing Bipartisan Frustration

McCaul expressed “growing bipartisan frustration” that the Commerce Department’s Bureau of Industry and Security (BIS) has not taken action in response to these allegations. He urged BIS officials to investigate SMIC’s facilities to determine whether it is violating export controls.

Pause on Existing Licenses Proposed

If China refuses to cooperate with an audit of SMIC’s facilities, McCaul suggested that BIS should pause all existing licenses for the company. This move would effectively block U.S. companies from exporting to SMIC.

SMIC’s Legal Status

SMIC was placed on the Commerce Department’s Entity List in 2020 due to alleged ties to the Chinese military. The Entity List typically restricts U.S. exports to targeted firms. However, the Trump administration’s rules allowed exporters to obtain licenses to ship goods and technology to Huawei and SMIC.

China’s Response

The Chinese embassy in Washington refuted McCaul’s accusations, stating that “certain U.S. politicians” were “overstretching the concept of national security” and politicizing economic issues. China maintains that SMIC has not engaged in any wrongdoing.

Implications for Artificial Intelligence

McCaul warned that SMIC’s potential violations could significantly impact the global race for artificial intelligence (AI) dominance. He emphasized the threat posed by China surpassing the U.S. in AI development.

Commerce Department’s Stance

The Commerce Department acknowledged receipt of McCaul’s letter and stated that it would respond through appropriate channels. The department has previously defended its track record on China-related export controls, claiming to be tougher than any previous administration.

Impact on U.S.-China Relations

McCaul’s accusations underscore the ongoing tensions between the U.S. and China over trade and technology. The dispute over SMIC’s role in China’s semiconductor industry could further escalate the bilateral rivalry.