Washington left with chip on shoulder after Huawei exposes export loophole lapses
- Reference: 1694538915
- News link: https://www.theregister.co.uk/2023/09/12/us_huawei_chip_sanctions/
- Source link:
Huawei launched the [1]Mate 60 Pro without much fanfare at the end of August, but it caused a stir nonetheless because its very existence seemed to prove that Washington's efforts to curb Chinese progress in advanced semiconductor technology weren't entirely successful.
According to [2]Nikkei Asia , two US lawmakers have now called for the government to close any loopholes in the technology export controls it has imposed on Chinese companies such as Huawei following the launch of the Mate 60 Pro.
[3]
Mike Gallagher, chairman of the House Select Committee on the Chinese Communist Party (CCP), is said to have pointed the finger at exemptions to the existing restrictions governing the export of semiconductor technology to the country, claiming these represent loopholes that allow Chinese companies to side-step the sanctions and access whatever technology they require.
[4]
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Last week, Gallagher was [6]reported to be calling for the US Commerce Department to end all technology exports to Huawei and Chinese chipmaker Semiconductor Manufacturing International Corporation (SMIC) after a teardown of the Mate 60 Pro revealed it is powered by a 7nm system-on-chip (SoC) from SMIC.
The chipmaker had previously been [7]capable of producing only 14nm silicon at best, leading to accusations that it had been in breach of US technology restrictions.
[8]
"This chip likely could not be produced without US technology and thus SMIC may have violated the Department of Commerce's Foreign Direct Product Rule," Gallagher said in a statement. However, analysts suggested that SMIC could have modified imported chipmaking equipment it was still able to buy freely in order to produce 7nm chips.
Meanwhile, it seems that the Department of Commerce was warned about the ineffectiveness of its export restrictions before.
Back in March, House Foreign Affairs Committee Chairman Michael McCaul wrote a [9]letter [PDF] to the department asking for clarification of the Biden administration's licensing policies regarding Huawei, claiming that "the current practice appears to deny few if any licenses to Huawei – even for items on the Commerce Control List."
[10]
McCaul went on to state that although the US authorities had been using the Entity List and Foreign Direct Product Rules (FDPR) to contain Huawei's march to dominate 5G telecoms systems worldwide, it was still able to buy significant amounts of US technology.
Licenses authorizing at least $61 billion in exports of technology to Huawei were approved between November 2020 and April 2021, McCaul claimed.
[11]China iPhone curbs reportedly extend to local government and state-owned businesses
[12]SK hynix says no Huawei its memory should be in Chinese wonder-phone
[13]Chinese meme-makers crown US Commerce Secretary as Huawei brand ambassador
[14]US and China to keep talking about chip bans, just not when they'll end
This is despite the US Department of Defense including Huawei on a list of "Communist Chinese military companies operating in the United States" in 2020 (a claim that Huawei has previously denied, although [15]under Chinese law , citizens and organizations are required to support intelligence gathering efforts by Beijing).
Huawei declined to comment on reports that its new smartphones might spark tighter and better policed US restrictions against it.
It was also reported that the teardown of the Mate 60 Pro revealed it contained LPDDR5 memory chips from Korean memory maker SK hynix, which are also covered by trade restrictions.
This could potentially land the company in hot water as the US has granted it exemptions from some export restrictions so that the company can continue with its China-based manufacturing operations.
SK hynix issued a statement denying any involvement and insisting that it no longer does business with Huawei since the introduction of the US sanctions on the company in 2020, as [16]reported by The Register last week.
It is possible that Huawei managed to secure supplies of certain components such as these memory products via unofficial sources, or the so-called grey market. This highlights the difficulty of enforcing trade restrictions on many goods since vendors have only limited control over what happens to their products after they have passed into the hands of distributors.
It had previously been reported that [17]Huawei was struggling because US sanctions were denying the company the advanced chips for smartphones that it required to make new models, so the restrictions are taking some toll on the business.
Huawei was last month linked with the [18]creation of a covert network of semiconductor facilities across China to tackle the limitations of US sanctions that have choked off its supply of chips. ®
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[1] https://www.theregister.com/2023/09/01/india_china_hardware_celebrations/
[2] https://asia.nikkei.com/Politics/International-relations/US-China-tensions/After-Huawei-5G-chip-debut-U.S.-lawmakers-call-for-tighter-export-controls
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZQDfg4D4kp@FpBt45W3kyQAAANA&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZQDfg4D4kp@FpBt45W3kyQAAANA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZQDfg4D4kp@FpBt45W3kyQAAANA&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.reuters.com/technology/us-lawmaker-calls-ending-huawei-smic-exports-after-chip-breakthrough-2023-09-06/
[7] https://www.theregister.com/2023/09/06/gina_raimondo_huawei_ambassador/
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZQDfg4D4kp@FpBt45W3kyQAAANA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[9] https://foreignaffairs.house.gov/wp-content/uploads/2023/03/Final-Huawei-Licensing-Letter-v738.pdf
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZQDfg4D4kp@FpBt45W3kyQAAANA&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[11] https://www.theregister.com/2023/09/11/asia_tech_news_roundup/
[12] https://www.theregister.com/2023/09/08/sk_hynix_huawei_probe/
[13] https://www.theregister.com/2023/09/06/gina_raimondo_huawei_ambassador/
[14] https://www.theregister.com/2023/08/29/china_usa_trade_talks_tech/
[15] https://en.wikipedia.org/wiki/National_Intelligence_Law_of_the_People%27s_Republic_of_China
[16] https://www.theregister.com/2023/09/08/sk_hynix_huawei_probe/
[17] https://www.theregister.com/2022/12/21/us_sanctions_huawei_chips/
[18] https://www.theregister.com/2023/08/24/china_us_tech_restrictions/
[19] https://whitepapers.theregister.com/
Rushed laws never work.
The knee jerk laws created by the US were always going to be flawed as they were written by angry people seeking vengeance but which do not understood technology.
The resulting loss of exports to China is not insignificant either.
A far better approach would have been to get smarter with the networking and intelligence gathering. Thus far, no one has provided concrete proof that any Huawei equipment has actually sent anything of value back to China. Any yet billions of pounds have been expended (aka land-fill wasted) worldwide on dumping and replacing Huawei equipment to "improve security" against a totally unknown and unvalidated threat. In fact the Chinese, although losing some exports, must have been having quite a laugh at us all.
This year, are all of our Christmas lights going to be validated against intelligence gathering devices in the power supplies? There are significantly more tree light sets the 4G/5G routers. If you were China which equipment would you bug?
If we have decided that this is an intelligence war then, surely, we must improve our defences? There are only so many fibre links to China and I am sure they are monitored continuously. Filtering traffic bound for China is a trivial task.
With modern AI we can easily see what is really going on at a much lower cost and with a lot less disruption. We could have spent a lot less of our precious money on better defences and used it to better effect on home grown technology ventures to beat the Chinese by creating better products.
With the EU and US spending billions of our taxes of trying to bolster the chip industry which, as we speak, is in decline again, we have to ask ourselves if the lunatics are still in the asylum?
Watching Biden's performances recently, we really ought to be worried as this is guy who just gave $6bn to Iran, did not attend the 9/11 Memorial, falsely claims he was at Ground Zero on 9/11/2001 and has his finger on the nuke button.
As Geena Davis said in the Fly "Be afraid, be very afraid."
the decaying empire attempts to stop the tide coming in.
Maybe it's time to clip the wings of a few hawks
The reason licences are granted is so as not starve US semi conductor interests of much needed revenues, without which, it cannot fund future R&D.
Seeing as China is a huge consumer of semi conductor products, when it is cut off from technology, it only has one possible route, to develop it itself.
Now it is spawning competitors left, right and centre, that will end up going head to head with US companies.
Do these 'visonaries' on US select committees not understand that cutting China off from US technology will never work in the long term? It was never going to work from the outset and China has made more progress in four years than anybody in those committees ever dreamt of. Because it has been forced to!
Doubling down on restrictions will just worsen the situation.
Two thirds of Qualcomm's revenue comes from Chinese interests!
I'm going to speculate a bit here and postulate that Huawei has a plan. It's not like them to cancel all orders to Qualcomm, announce a return to a multi flagship per year cycle and not accommodate a tightening of restrictions.
I'd wager that they have already reached a point on hardware where US restrictions (however intense) will have a waning effectiveness going forward.
From here on in I reckon they'll simply improve on what they've already initiated.
The CEO of ASML has consistently said sanctions aren't the way and won't work. He's repeated the same line since 2019 and the most recent was this week on Dutch TV.
He is right.
It's time to bring Big Bird out and explain it to the Hawks!
$61 billion in exports [approved] between November 2020 and April 2021
That's not a rounding error, guys.
That's you fucking up in a major way.
It's very nice to hear your bluster, but when the figures come in, you're nothing but bullshit.
The Good, the Bad and the Ugly.....
Quote: "....the Department of Commerce was warned about the ineffectiveness of its export restrictions before..."
Funny that....."export restrictions".....but we get Cisco equipment PUSHED EVERYWHERE.......
Of course, stuff from San Jose, CA couldn't possibly contain spyware, now could it??
Bad Chinese!!! Good White Hats in California!!!
Is it still "counterfeit" if you make it yourself?
Just badge the chips with a cover identity?
It's humorous to watch US House Republicans try to act like they know science and technology
when their whole purpose in non-governing is to prevent Americans from having a decent education.