China still buys chip manufacturing machines using American technology

Chinese companies have still been able to buy chip production equipment containing US technology in recent months, even though Washington has implemented many restrictive regulations.

In October 2022, the US Department of Commerce issued a new ban, preventing Chinese companies from using US semiconductor tools or containing US technology if used to create chips on a 14 nm or more advanced process. However, according to the 741-page report of the Select Committee of the US House of Representatives published on November 14, Chinese companies can still buy new chip manufacturing machines "if they say it is included in the old line, Do not use to create advanced chips".

American and Chinese flags are on a circuit board, taken on February 17. Photo: Reuters

After last year's ban, the US continuously sought to fix important loopholes in its efforts to prevent China from accessing modern chip manufacturing tools, while also convincing Japan and the Netherlands to do the same. The two countries introduced restrictions in July and September, without mentioning China by name.

However, according to reports, China has been stockpiling semiconductor manufacturing equipment by taking advantage of the lag time between the ban. From January to August, China imported $3.2 billion worth of chip manufacturing machines from the Netherlands, up 96.1% from the $1.7 billion recorded in the same period in 2022. In total, China's imports of semiconductor equipment from countries reached 13.8 billion USD in the first eight months of the year.

The issue of China still buying chip manufacturing machines with American technology was raised after Huawei announced a trio of Mate 60 phones running 7 nm chips created by SMIC, China's leading chip manufacturer. Huawei and SMIC were both placed on the US entity list in 2019 and 2020.

Previously, according to Bloomberg , SMIC was said to use ASML's deep ultraviolet (DUV) lithography equipment to create Kirin 9000s chips for the Mate 60 series. Although not as modern as the ultraviolet (EUV) lithography system, , DUV can still be used in advanced chip manufacturing, although the process is more complex and expensive. ASML has never sold EUV to China because of export restrictions since 2019.

The report does not make recommendations to address the problem, but urges the U.S. Congressional Joint Accountability Office to provide a regular six-month assessment of the effectiveness of export control measures. exports of chip manufacturing and semiconductor manufacturing equipment to China.