Raimondo wants more and better tools to curb Huawei
Initially ‘upset’ by Huawei’s Mate60 Pro launch with a local 7nm chip, the top US commerce official now is ‘incredibly disturbed’
The United States has vowed to add new tools and increase resources to enforce its export-control regime after China’s sanctioned tech giant Huawei Technologies’ recent breakthrough in producing 7-nanometer (nm) chips.
US Commerce Secretary Gina Raimondo told a Senate Commerce Committee hearing on October 4 that reports of Huawei’s chip breakthrough were “incredibly disturbing.”
Raimondo said more resources were needed for the enforcement of the export controls, Washington’s top tool in its chip war with China. She also said her department should be granted more power to check whether any technology transactions may pose national security risks.
As an example, she said that earlier this year the Commerce Department had imposed the largest-ever fine in history on a US firm for selling items to Huawei without a license.
She was referring to the case in April where Seagate Technology agreed to pay a US$300 million penalty in a settlement with US authorities for shipping over $1.1 billion worth of hard disk drives to Huawei in 2021 without a license.
“The launch of Huawei’s new 5G mobile phones has proven that the effectiveness of the US curbs against China’s chip sector is not satisfactory,” He Wenping, a researcher at the Chinese Academy of Social Sciences and a commentator for China Central TV, says in an article published on October 5.
She says the fact that the US highlighted its effort to punish a firm that had violated its export controls two years ago showed how urgently Washington wishes to contain China’s technological development.
“The US feels anxious as it can’t suppress China’s development. But it will not admit this,” He asserts in the article. “After seeing China’s breakthrough, Raimondo has chosen not to face the reality but to try to further suppress China’s chip sector.”
She says the US will continue to use political means to interfere with commercial operations in order to maintain its leading position forever. She says the US will not succeed as more sanctions will only push China to achieve more breakthroughs.
From ‘upset’ to ‘disturbed’
On August 29 – during Raimondo’s visit to China – Huawei launched its Mate60 Pro smartphone, which uses its self-developed Kirin 9000s processor.
Techinsights, a Canadian research firm, said on September 3 that the Kirin 9000s chip was made by China’s Semiconductor Manufacturing International Corp (SMIC), the country’s top chipmaker.
Chinese media said SMIC, led by former TSMC engineer Liang Mong-song, used its N+2 processing technology to make 7nm chips for Huawei, although the production might be costly as it requires multiple exposures using deep ultraviolet (DUV) lithography equipment.
On September 20, Raimondo told US lawmakers that she was “upset” by the launch of Mate60 pro during her China trip. She said the only good news was that there was no evidence that China can make 7nm chips “at scale.”
She also said that the Commerce Department was still investigating whether any company had circumvented the US export controls.
For their part, US legislators were impatient about the investigation’s progress. On September 14, a group of 10 Republican lawmakers called on the Commerce Department’s Bureau of Industry and Security (BIS) to deny all export items for Huawei, SMIC and their units including Honor, the Huawei spinoff firm that took over its budget phone business in 2020.
Some commentators have pointed out that the existing US curbs have loopholes as they do not forbid non-American engineers from working for the sanctioned Huawei and SMIC while the re-sale of lithography equipment within China is not monitored. They also note it takes time to identify small traders that source US items destined for sanctioned Chinese firms.
Critical technologies
Nikkei reported on Thursday that Taiwan is set to announce this year a list of critical technologies it wants to bar from reaching China.
Wellington Koo, secretary-general of Taiwan’s National Security Council, said in the report that the list will clearly define the core technologies in the semiconductor, agriculture, aerospace and information and communications technology (ICT) sectors.
In particular, Koo said Taiwan wants to prevent mainland China from obtaining its chip design technologies. The European Commission Tuesday announced on Tuesday its own list of critical technologies and called on the European Union’s member states to assess their security risks.
The technology areas include:
- advanced semiconductors,
- artificial intelligence,
- quantum,
- cyber security,
- advanced sensing,
- space and propulsion,
- energy,
- advanced materials, manufacturing and recycling technologies,
- biotechnology and
- robotics and autonomous systems.
Huawei’s investments
In late September, Huawei released its founder Ren Zhengfei’s comments made in July and August about the impact of the US sanctions on his company.
“US sanctions are indeed pressure on us, but pressure is also motivation,” Ren told a group of students who participated in the International Collegiate Programming Contest in two meetings on August 21 and 26.
“In the past, we built our basic platform in the US. But after the US sanctioned us, we were forced to switch to a new platform. The process was difficult,” Ren said.
“After these four years of hard work involving 200,000 employees, we have basically established our own platform,” he said. “In the future, we may not necessarily run on the same basis as the US platform, but there will still be certain interconnections.”
Ren was referring to the establishment of Huawei’s HarmonyOS after the company was banned from using Google’s Android system in May 2019. The Shenzhen-based firm also launched EulerOS for enterprise applications.
He added that Huawei’s team consists of more than 7,000 foreign scientists and specialists, 13,800 who studied abroad and over 100,000 top local student hires.
He said if the US bans Chinese students from studying certain subjects in its universities, Huawei can only hire talent from China’s universities.
He also said Huawei has begun to pay attention to basic scientific research and is investing about $3 billion to $5 billion every year in the area. He said Huawei wants to enjoy more first-mover advantages secured from transforming scientific achievements into commercial products.
In a separate event in July, Ren told Liu Yadong, former editor-in-chief of China’s Science Daily, that Huawei has allowed software developers to freely use its cloud resources and build their apps on HarmonyOS and EulerOS in order to create new ecosystems.
He said after “donating” all these resources, Huawei will still deploy tens of thousands of people and invest billions of yuan to grow its ecosystems every year.
Follow Jeff Pao on Twitter at @jeffpao3