US Lawmaker Calls for Crackdown on Chinese Chipmaker SMIC Amid AI Concerns
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US needs to crack down on Chinese chipmaker SMIC, Republican lawmaker says
(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. (Reporting by Karen Freifeld; Editing by Chris Sanders and Mark Potter)
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US Needs to Crack Down on Chinese Chipmaker SMIC, Republican Lawmaker Says
(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. (Reporting by Karen Freifeld; Editing by Chris Sanders and Mark Potter)
[3]
US needs to crack down on Chinese chipmaker SMIC, Republican lawmaker says
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) (0981.HK), opens new tab 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. Reporting by Karen Freifeld; Editing by Chris Sanders and Mark Potter Our Standards: The Thomson Reuters Trust Principles., opens new tab
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Republican Michael McCaul urges the Biden administration to investigate SMIC's alleged violations of export controls, citing concerns over AI chip production for Huawei and potential threats to US technological supremacy.
Republican Lawmaker Demands Action Against Chinese Chipmaker SMIC
Michael McCaul, chair of the House Foreign Affairs Committee, has accused the Biden administration of inadequate measures to prevent China's Semiconductor Manufacturing International Corp (SMIC) from bolstering the country's chipmaking industry and military-industrial complex. In a letter dated November 4, McCaul expressed "growing bipartisan frustration" over the Commerce Department's Bureau of Industry and Security (BIS) inaction regarding reports of Huawei's attempts to circumvent U.S. export controls
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.Allegations of Export Control Violations
McCaul asserts that "growing evidence" suggests SMIC is violating U.S. export control laws. He has called for Commerce Department agents to inspect SMIC's facilities to determine whether the company is illegally producing chips for Huawei, a sanctioned telecommunications company considered a national champion in China's chip industry
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.The Republican lawmaker emphasized that if China refuses to agree to a "comprehensive audit of all SMIC facilities and its books," the BIS should suspend all existing licenses for SMIC
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.SMIC's Technological Advancements and AI Concerns
McCaul pointed to SMIC's recent breakthroughs as potential evidence of violations:
- Development of an advanced chip for a Huawei smartphone
- Expected production of over a million AI processors for Huawei
These advancements, according to McCaul, constitute a "smoking gun" for export control violations and could potentially enable China to surpass the United States in artificial intelligence capabilities
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.Related Stories
Regulatory Background and Entity List
SMIC was added to the Commerce Department's restricted trade list, known as the "Entity List," in 2020 due to alleged ties to the Chinese military-industrial complex. Huawei had been placed on the list a year earlier for alleged sanctions violations. Both companies have previously denied any wrongdoing
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.Typically, inclusion on the Entity List prohibits U.S. shipments to targeted firms. However, when the Trump administration added Huawei and SMIC to the list, their rules allowed exporters to obtain licenses for shipping billions of dollars worth of U.S. goods and technology to these companies
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.Responses and Reactions
The Commerce Department acknowledged receipt of McCaul's letter and stated it would respond through "appropriate channels." In response to similar criticism last week, the department asserted that no previous Commerce Department had been tougher on China
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.SMIC and Huawei have not immediately responded to requests for comment on the matter
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.The Chinese embassy in Washington issued a statement criticizing "certain U.S. politicians" for "overstretching the concept of national security" and politicizing "science and technology and economic and trade issues"
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.As tensions continue to escalate in the realm of semiconductor technology and AI development, this situation highlights the ongoing challenges in balancing national security concerns with international trade and technological advancement.
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