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US needs to crack down on Chinese chipmaker SMIC, Republican lawmaker says
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US needs to crack down on Chinese chipmaker SMIC, Republican lawmaker says
Nov 6, 2024 1:01 AM

Nov 5 (Reuters) - A top Republican lawmaker has accused

the Biden administration of not doing enough to prevent China's

Semiconductor Manufacturing International Corp (SMIC)

from strengthening the country's chipmaking industry and

military-industrial complex.

Michael McCaul, chair of the House Foreign Affairs

Committee, urged U.S. Commerce Department agents to visit SMIC's

facilities and check whether the company is illegally producing

chips for Huawei, the sanctioned telecommunications company seen

as a national champion within China's chip industry.

In a Nov. 4 letter seen by Reuters, McCaul described what he

called "growing bipartisan frustration" that the Commerce

Department's Bureau of Industry and Security (BIS) had not acted

on reports of Huawei's efforts to evade U.S. export controls.

"There is growing evidence that SMIC is violating U.S.

export control laws," McCaul wrote to BIS under secretary Alan

Estevez. If China is not willing to immediately agree to a

"comprehensive audit of all SMIC facilities and its books,"

McCaul said, "BIS should pause all existing licenses for SMIC."

McCaul said SMIC's breakthroughs - including its advanced

chip in a Huawei smartphone, and expected production of over a

million AI processors for Huawei - are a "smoking gun" for a

violation and could help China surpass the U.S. in artificial

intelligence.

The Commerce Department said it had received McCaul's letter

and would respond through "appropriate channels." Last week, in

response to similar criticism, it said that no Commerce

Department had been tougher on China.

SMIC did not immediately respond to requests for comment,

nor did Huawei.

The Chinese embassy in Washington said in a statement that

"certain U.S. politicians" were "overstretching the concept of

national security" and politicizing "science and technology and

economic and trade issues."

SMIC was added to the Commerce Department's restricted trade

list in 2020 for alleged ties to the Chinese military industrial

complex. A year earlier, Huawei was placed on the list after

alleged sanctions violations. Both companies have previously

denied wrongdoing.

Being on the "Entity List," as it's called, usually bars

U.S. shipments to targeted firms. But when the Trump

administration added Huawei and SMIC, their rules allowed

exporters to get licenses to ship billions of dollars in U.S.

goods and technology to them.

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