(Bloomberg) — Huawei Technologies Co. and its partner Semiconductor Manufacturing International Corp. relied on US technology to provide a complicated chip in China last 12 months, in line with individuals with knowledge of the matter.
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Shanghai-based SMIC used gear from California-based Applied Materials Inc. and Lam Research Corp. to fabricate a complicated 7-nanometer chip for Huawei in 2023, the people said, asking to not be named as the small print should not public.
The previously unreported information suggests that China still cannot entirely replace certain foreign components and equipment required for cutting-edge products like semiconductors. The country has made technological self-sufficiency a national priority and Huawei’s efforts to advance domestic chip design and manufacturing have received the backing of Beijing.
Representatives of SMIC, Huawei and Lam didn’t reply to requests for comment. Applied Materials and the US Commerce Department’s Bureau of Industry and Security, which is liable for implementing export controls, declined to comment.
Lauded in China as a significant leap in indigenous semiconductor fabrication, last 12 months’s SMIC-made processor powered Huawei’s Mate 60 Pro and a wave of patriotic smartphone-buying within the Asian country. The chip remains to be generations behind the highest components from global firms, but ahead of where the US hoped to stop China’s advance.
The machinery used to make it, nevertheless, still had foreign sources including technology from Dutch maker ASML Holding NV in addition to the gear from Lam and Applied Materials. Bloomberg News reported in October that SMIC had used equipment from ASML for the chip breakthrough.
Leading Chinese chip equipment suppliers including Advanced Micro-Fabrication Equipment Inc. and Naura Technology Group Co. have been attempting to meet up with their American peers, but their offerings are still not as comprehensive or sophisticated. China’s top lithography system developer Shanghai Micro Electronics Equipment Group Co. still lags just a few generations behind what industry leader ASML is able to.
SMIC obtained the American machinery before the US banned such sales to China in October 2022, a few of the people said. Each firms were among the many American suppliers that began pulling their staff from China after those rules went into effect and prohibited US engineers from servicing some machines within the Asian country. ASML also told American employees to stop working with Chinese customers in response to the US curbs, but Dutch and Japanese engineers are still in a position to service many machines in China — much to the chagrin of their American rivals.
Firms are actually prohibited from selling cutting-edge, US-origin technology to either SMIC or Shenzhen-based Huawei. Each tech firms have been blacklisted by the US for alleged links to the Chinese military, while Washington has been tightening China’s overall access to chipmaking equipment and advanced semiconductors.
Those trade curbs pushed Huawei and SMIC to pursue avenues for constructing a domestic chip supply chain, and the Mate 60 Pro marked a surprising advance in that effort.
Read More: China Secretly Transforms Huawei Into Most Powerful Chip War Weapon
After Huawei released the brand new phone, Washington launched a probe into its processor and US Commerce Secretary Gina Raimondo vowed the “strongest possible” actions to make sure national security. Meanwhile, Republican lawmakers have called for the Biden administration to completely cut off Huawei and SMIC’s access to US technology.
Department of Commerce officials have said they haven’t seen evidence that SMIC could make the 7nm chips “at scale,” some extent echoed by ASML’s Chief Executive Officer Peter Wennink.
If SMIC desires to advance its technology without ASML’s state-of-the-art extreme ultraviolet lithography systems, the Chinese chipmaker won’t give you the option to provide chips at a commercially meaningful volume on account of technical challenges, Wennink told Bloomberg News in late January.
“The yield goes to kill you. You’re not going to get the variety of chips that that you must have high volume chip production,” he said. ASML has not been in a position to sell its EUV systems to China because the Dutch government has not issued a license allowing those exports.
The US, meanwhile, is pressing allies including the Netherlands, Germany, South Korea and Japan to further tighten restrictions on China’s access to semiconductor technology. That effort is proving controversial and meeting resistance in some countries, because it imposes limits on trade at a time that Chinese businesses are investing in equipment and computational power to compete in the substitute intelligence race.
Huawei could also be China’s most promising candidate to develop AI chips to compete with the US. Industry leader Nvidia Corp.’s CEO, Jensen Huang, in December called the Shenzhen firm a “formidable” rival.
Read More: US Urges Allies to Squeeze China Further on Chip Technology
–With assistance from Gao Yuan, Vlad Savov and Edwin Chan.
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