Lawmakers, including the chairmen of the Foreign Affairs Committee, the Energy and Commerce Committee, the Military Affairs Committee and the China Committee, called on the Commerce Department to stop issuing export licenses to Beijing's state-owned enterprises like SMIC and impose additional, tighter restrictions.
The letter, written by House Foreign Affairs Committee Chairman Michael McCaul, said that “the United States should strategically block SMIC semiconductor products, especially those that pose a national security risk, from entering the domestic market,” and “prosecute the top executives of SMIC and Huawei.”
The US Commerce Department said in a statement last week that it was seeking more information about the “characteristics and components” of the chip used in Huawei’s recently launched Mate 60 Pro phone. But it also stressed that “the restrictions imposed since 2019 have knocked Huawei down and forced it to reinvent itself at significant cost.”
The Mate 60 Pro is Huawei's latest smartphone, containing a chip that analysts believe was created thanks to a technological breakthrough by SMIC.
The Chinese electronics giant was placed on a trade blacklist in May 2019 on national security grounds, meaning suppliers in the US and elsewhere must apply for a special license to do business with Huawei.
“Revoke all existing licenses”
In early March 2023, the US Department of Commerce, led by the Bureau of Industry and Security (BIS), said that more than 639 China-based entities were on the trade blacklist. The entity list was created during the Trump administration and refers to entities that are ineligible to receive any items under the Export Administration Regulations without a separate license. Of these, more than 155 were added by the Biden administration.
However, SCMP said, “there were 192 licenses granted out of 242 applications approved in the period from January to March 2022, of which 115 licenses contained restricted technology.”
In other words, about 69.9% of the applications were approved, allowing the shipment of US goods and technology to blacklisted entities. These licenses were worth more than $23 billion.
In the period from November 2020 to April 2021, Huawei suppliers alone received 113 licenses, worth nearly $61 billion. For SMIC, the figure was 188 licenses, equivalent to $42 billion in goods.
“It is astonishing that the Commerce Department continues to license the sale of critical American technology to our adversaries,” said Michael McCaul, then chairman of the House Foreign Affairs Committee.
In response, the Commerce Department said that “all licenses reflected in the data primarily relate to older technologies and items that do not pose significant national security concerns.” The BIS also noted that some sales licenses to major Chinese companies were established during the Trump administration.
The letter from the House group of lawmakers also asks the Commerce Department to “revoke all existing licenses to SMIC and Huawei.”
(According to Reuters, TechWireAsia)
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