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China receives US equipment to make advanced chips despite new rules, report says


The flags of China and the United States are displayed on a circuit board with semiconductor chips, in this illustration taken February 17, 2023. REUTERS/Florence Lo/Illustration/File photo acquire license rights

WASHINGTON, Nov 14 (Reuters) – Chinese companies are buying U.S. chipmaking equipment to make advanced semiconductors, despite a series of new export restrictions aimed at thwarting progress in the semiconductor industry of the country, according to a report released Tuesday.

The 741-page annual report, released by the US-China Economic and Security Review Commission, takes aim at export restrictions imposed by the Biden administration in October 2022, which aim to prevent Chinese chipmakers from obtain American chipmaking tools if they are used to make advanced chips. at the node of 14 nanometers or less.

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

The discovery comes as the United States scrambles to understand how Chinese telecommunications giant Huawei was able to produce an advanced 7-nanometer chip to power its Mate 60 Pro smartphone at leading Chinese chipmaker SMIC, despite restrictions on production. exports announced last year.

Huawei and SMIC were also added to a list of trade restrictions in 2019 and 2020, which theoretically prohibits U.S. suppliers from delivering certain technologies to companies.

Chinese observers had speculated that SMIC could have made the chip with equipment obtained before the October 2022 rules, but it had other options for obtaining the equipment overseas, according to the report.

The United States managed to fill a significant gap in its efforts to prevent China from accessing advanced chipmaking tools by convincing its allies Japan and the Netherlands, which have equipment industries to manufacturing equally robust chips, to announce their own restrictions on exports of the coveted technology.

But China stockpiled equipment taking advantage of the gap between the American rules of October 2022 and similar measures taken by Japan and the Netherlands in July and September 2023 respectively, the report details.

According to the document, between January and August 2023, China imported $3.2 billion (RMB 23.5 billion) worth of semiconductor manufacturing machinery from the Netherlands, an increase of 96.1%. compared to $1.7 billion (RMB 12 billion) recorded in the same period in 2022. China’s imports of semiconductor equipment from all countries totaled $13.8 billion (RMB 100 billion). RMB) during the first eight months of 2023, the document added.

The report does not make a specific recommendation to address gaps in the U.S. rules, but urges Congress to request an annual assessment, to be completed within 6 months by the General Accountability Office and made public later, of the effectiveness of the controls for export on chip manufacturing. equipment in China.

The U.S.-China Economic and Security Review Commission was established in 2000 to submit an annual report to Congress on the security implications of U.S.-China economic ties. national and to make recommendations on government action.

(This story has been corrected to show that the report was issued by the U.S. China Economic and Security Review Commission, not the House Select Committee on China, in paragraph 2. )

Reporting by Alexandra Alper; Editing by Chizu Nomiyama and Kim Coghill

Our Standards: The Thomson Reuters Trust Principles.

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