Credit：Xinhua News Agency
The growing prevalence of American, Japanese, and Dutch semiconductor manufacturing equipment in the China could give the country’s military an advantage in building advanced chips all while building up the country’s domestic chip capacity, wrote by Chairman John Moolenaar, a Republican, and Ranking Member Raja Krishnamoorthi, a Democrat, of a House committees focusing on the Sino-U.S. competition, according to a press released at the committee's website on Friday.
These Representatives have sent letters to American firms KLA, Applied Materials, Lam Research as well as Japan-based Tokyo Electron, and Dutch ASML Holding NV for their inquiry. In the letters, the lawmakers said these semiconductor equipment manufacturers can help them better understand the flow of small and midsize enterprise (SME) to China and its contributions to China’s rapid buildout of its semiconductor manufacturing industrial base.
The lawmakers cited “alarming reports” that showed the Chinese mainland now purchases more semiconductor manufacturing equipment than the United States, South Korea, and the Taiwan region combined. They believe the shockingly massive purchase will not only help China supply chips to Russia’s war machine, threaten its neighbors, but also allow China to continue to progress in critical fields such as artificial intelligence (AI), which are at the very heart of the strategic competition between China and the United States.
"We understand that some (toolmakers) believe we should limit the expansion of...future unilateral U.S. controls, due to perceived impacts on the competitiveness of this sector," the lawmakers wrote. "However, enhanced export controls simply are not mutually exclusive with a robust and thriving (toolmaking) industry."
Neither KLA, LAM, Applied Materials, Tokyo Electron nor Dutch ASML responded to requests for comment on the letters. The inquiry is part of latest efforts that key U.S. lawmakers are making to further Chinese tech industries.
Moolenaar and Krishnamoorthi last month sent a letter to U.S. Commerce Secretary Gina Raimondo, calling for further restrictions on Huawei Technologies Co. suppliers by blocking their access to American chipmaking gear.
In their latter, the lawmakers said Huawei is making efforts to circumvent restrictions imposed by the agency, which oversees a pivotal trade restriction list as well as broader export controls on advanced chips and manufacturing tools.
Huawei’s rapid buildout of semiconductor fabrication facilities still relies on a large amount of U.S.-produced manufacturing equipment (SME), which provides the United States with an opportunity to deny Huawei its chip ambitions, the lawmakers wrote. They revealed that, Huawei concealed its involvement with these facilities while utilizing chip firms like Pengxinxu, SwaySure Technology, Qingdao SiEn, and potentially many others, none of which are currently listed on the Department of Commerce’s Entity List.
Previously, the Commerce added Huawei's clandestine semiconductor firm, PXW Semiconductor, to the Entity List. Now, the lawmakers say, it is time to consider adding PXW's sister companies to the Entity List as well.
They argued that PXW Semiconductor’s sister firm, SwaySure, which reportedly is developing advanced memory chips for artificial intelligence (AI), is understood to be ultimately controlled by the Shenzhen State-owned Shenzhen Major Industrial Investment Group Co., Ltd., the same entity that controls PXW (on the entity list), with SwaySure also being run by former Huawei executives and reportedly engaging in “supply chain collaboration and research” with Huawei.
Pengxinxu is also believed to be ultimately run by the Shenzhen Major Industrial Investment Group Co., Ltd., and Chinese media has said PXW, SwaySure and Pengxinxu are all pillars of the Shenzhen government’s buildout of its semiconductor capacity, the lawmakers noted.
