After a chip breakthrough, US legislator calls for end to Huawei and SMIC exports

The US Commerce Department should halt all technology exports to Huawei and China's leading semiconductor manufacturer, according to the chairman of the House Committee on China.

This comes after the discovery on Wednesday of new processors in Huawei phones that may breach trade rules.

Representative Mike Gallagher made the remarks after Chinese electronics giant Huawei (HWT.UL) last week began selling a phone called the Mate 60 Pro. Gallagher is a prominent Republican lawmaker whose select committee has urged the Biden administration to take a tougher stance on sending American technology to China. According to analysts, the chip in the phone was created by Semiconductor International Manufacturing Corp. (SMIC) using a technological advancement.

In a statement, Gallagher said that it was likely impossible to build this chip without US technology, suggesting that SMIC may have broken the Department of Commerce's rule against exporting foreign direct products. In order to make it clear that any company that disobeys American law and jeopardizes national security will be shut off from access to the nation's technology, he added that it was time to stop all technology exports from the United States to both Huawei and SMIC.

Due to concerns about its national security, Huawei was added to a trade blacklist in May 2019, requiring its U.S. suppliers and other parties to obtain a special license in order to send goods to it. SMIC was included on the 'entity list' in December 2020 due to concerns that it would transfer cutting-edge technology to military users.

The Foreign Direct Product Rule prohibits any company, anywhere in the world, from using equipment to manufacture a chip for Huawei. This rule is one of the trade restrictions imposed on Huawei and SMIC.