McCaul Seeks Probe of SMIC’s Compliance With US Export Controls
House Foreign Affairs Committee Chairman Michael McCaul, R-Texas, urged the Commerce Department Nov. 5 to investigate whether China’s Semiconductor Manufacturing International Corporation (SMIC) violated U.S. export controls.
In a letter to Undersecretary of Commerce for Industry and Security Alan Estevez, McCaul said that while the Bureau of Industry and Security has a presumption of denial licensing policy for SMIC South, the company’s most advanced production line, the rest of the firm faces few restrictions and could easily obtain and illegally transfer controlled items to SMIC South. He said SMIC South’s recent advances in using the 7 nanometer manufacturing process to make computing chips suggest that such transfers may have occurred.
“I call for BIS to immediately initiate end-use checks on all SMIC facilities in [China], including SMIC South, to verify that licenses are not being violated,” McCaul wrote. If China “is unwilling to immediately agree to a comprehensive audit of all SMIC facilities and its books, BIS should pause all existing licenses for SMIC until the [Biden] administration can access the facilities and certify to Congress that the diversion of licensed items to unauthorized uses is not occurring.”
McCaul said SMIC's recent advances include Huawei’s launch in August 2023 of its 5G-capable Mate60 Pro smartphone, which has a semiconductor that SMIC South made with the 7nm process. SMIC South is also producing a graphic processing unit that, if made in the U.S., could not be exported to China, he added.
A Commerce spokesperson said the department has received McCaul's letter and "will respond through the appropriate channels.” However, Estevez told McCaul's committee in March that SMIC “potentially” violated U.S. export controls by producing 7nm chips with American equipment it obtained before BIS imposed updated export controls on chip-making tools last year (see 2403210068). At the time, Estevez declined to say whether BIS was investigating SMIC.
McCaul is not the only lawmaker to argue that the U.S. is providing too much advanced technology to SMIC. The House Appropriations Committee has proposed legislation that would call on BIS to rescind all licenses issued to entities to sell to SMIC and Huawei (see 2407120055).