Huawei, the Chinese tech giant, is facing accusations from a prominent semiconductor manufacturers’ association of operating covert chip-making facilities across China. The goal, it’s claimed, is to evade US sanctions imposed on the company. According to reports, Huawei, which ventured into chip production last year and received substantial government funding, has allegedly acquired at least two existing chip plants and is constructing three more.
The Washington-based Semiconductor Industry Association (SIA) suggests that if Huawei is indeed operating these facilities under the guise of other companies, it could potentially bypass US restrictions by indirectly procuring American chip-making equipment. This development follows the US Commerce Department’s placement of Huawei on its export control list in 2019, citing security concerns, a charge that Huawei vehemently denies.
Under current US trade regulations, most suppliers are restricted from exporting goods and technology to Huawei unless they obtain specific licenses. The US government has consistently tightened controls to curtail Huawei’s ability to purchase or design semiconductor chips, essential components in its products.
In 2019, the Trump administration declared a national economic emergency, granting the US government authority to prohibit technology and services from “foreign adversaries” considered a “unacceptable risk” to national security. While Huawei was not directly named in the order, it followed extensive pressure from the US on the company.
The Biden administration has maintained a robust stance on China’s tech influence, with President Biden recently signing an executive order restricting certain US investments in sensitive technology in China and mandating government notification of funding in select tech sectors.
This move prohibits or limits specific US investments in Chinese entities across semiconductors and microelectronics, quantum information technologies, and particular artificial intelligence systems. President Biden’s executive order aims to address the threat posed by countries such as China in “sensitive technologies and products critical to the military, intelligence, surveillance, or cyber-enabled capabilities.”
Additionally, last August, President Biden signed the Chips Act, a $50 billion investment program designed to enhance American semiconductor research, development, and production, ensuring US leadership in this critical technology. The US currently produces only about 10% of global microchip production, relying heavily on East Asia for the remaining 75%, including the most advanced chips.
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