US Lawmakers Push for Stricter Sanctions Against China’s Leading Chipmaker Following Huawei’s Technological Advancement

Shares in China’s largest contract chipmaker, SMIC, experienced a significant drop following calls from two US congressmen urging further restrictions on export sales to the company. This move comes on the heels of Huawei’s launch of the Mate 60 Pro, a Chinese smartphone featuring an advanced chip believed to be manufactured by SMIC.

Industry experts were surprised by this development, given the United States’ extensive efforts to restrict China’s access to foreign chip technology. TechInsights, a Canadian research organization specializing in semiconductors, later confirmed that the smartphone indeed contained a new 5G Kirin 9000s processor developed by SMIC specifically for Huawei.

This development has raised concerns among analysts that the ongoing US-China tech conflict may intensify in the near future. US representative Mike Gallagher, chairman of the US House of Representatives committee on China, called on the US Commerce Department to halt all technology exports to Huawei and SMIC, citing potential violations of US sanctions. He argued that the chip in question likely could not have been produced without US technology and emphasized the need to cut off technology exports to firms undermining US law and national security.

In response to these developments, SMIC’s shares fell by 8.3% in Shanghai and 7.6% in Hong Kong, while Hua Hong Semiconductor, China’s second-largest chip foundry, also experienced a 5.8% decline.

Furthermore, Texas Republican Michael McCaul, who chairs the House Foreign Affairs Committee, expressed concerns about China’s potential monopoly in the manufacture of less-advanced computer chips. He highlighted the importance of addressing legacy semiconductor chips, which are not subject to export controls.

Chinese state media celebrated this development as a sign of the country’s successful defiance of US sanctions and achievement of technological independence in advanced chipmaking. Memes circulating on Chinese social media humorously crowned US Commerce Secretary Gina Raimondo the unofficial brand ambassador for the Mate 60 series, attributing the phone’s launch to US sanctions indirectly pushing Chinese firms to work with available technology.

As a result of these developments, analysts expect the Biden administration to tighten the ban on chip exports to China in the coming months, further restricting China’s access to advanced US semiconductors. This escalation is seen as a continuation of the US-China tech war, with potential implications for global technology supply chains.

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