The US is considering imposing sanctions on a number of countries involved in Huawei’s semiconductor production after the Shenzhen-based tech giant made a major breakthrough.
The US has invested billions of dollars to secure domestic semiconductor production, fearing possible espionage and sabotage by China against companies in Taiwan, where more than 60% of the world’s semiconductor production takes place.
This latest move by the US government, reported by Bloombergappears to be a step forward in efforts to limit China’s ability to produce and export domestically produced chips, with Beijing managing to produce highly complex chips despite existing sanctions.
The loopholes in export legislation are actively exploited
Those familiar with the matter reported it Bloomberg that the Semiconductor Industry Association (SIA) previously determined that a number of Chinese chip production sites acquired or built by Huawei could be affected.
The US has its sights on a number of Chinese companies. This includes Qingdao Si’En, Shenzhen Pensun Technology CO. and SwaySure, among other more important manufacturers such as ChangXin Memory Technologies Inc., according to those cited by Bloomberg.
Semiconductors are an essential part of virtually every electronic device, from civilian applications such as transportation and healthcare to technologically advanced military guidance and tracking systems.
Jeffries analyst Edison Lee said of the announcement: “Adding more Chinese companies to the US Entity List is a highly likely event. It is easy to implement and justify, and it will further deter certain key Chinese companies from exploiting the current loopholes in export restrictions.”
Due to the essential nature and value of semiconductors in everyday life, the Biden administration’s CHIPS Act has set aside tens of billions of dollars to secure chip manufacturing sites in the US. Several billion dollars have already been invested in sites being built by Intel and the Taiwan Semiconductor Manufacturing Company.