US targets China's top chipmaking plant after Huawei Mate 60 Pro, sources say

Biden administration cuts off SMIC's advanced factory from U.S. imports after producing chip for Huawei phone.

The Biden administration is turning up the heat on China's Semiconductor Manufacturing International Corp (SMIC) by cutting off its most advanced factory from more American imports after it produced a sophisticated chip for Huawei's Mate 60 Pro phone, three people familiar with the matter said.

Late last year, the U.S. Commerce Department sent dozens of letters to U.S. suppliers to SMIC, suspending permission to sell to its most advanced plant, said two people familiar with the matter who requested anonymity because they were not authorised to speak publicly about the matter.

While many companies had already stopped selling to SMIC South, as the unit is known, the letters halted millions of dollars worth of shipments of chipmaking materials and parts from at least one supplier, Entegris, one of the people said. Reuters found no evidence that Entegris had violated any U.S. laws or regulations.

Entegris said it made the shipments in accordance with a valid export license and halted them after receiving letters from the U.S. Commerce Department suspending permission to send products to SMIC South. The Massachusetts-based company, which produces filters, gases, chemicals, and products for handling wafers, the building blocks for making chips, said it monitors and complies with the "rapidly evolving regulatory requirements" for international trade affecting the chip industry.

SMIC did not respond to a request for comment. Huawei, the White House and the Commerce Department declined to comment.

“This is out-and-out economic bullying and will inevitably backfire,” said a spokesperson for the Chinese embassy in Washington. “We urge the U.S. side to stop overstretching the concept of national security and abusing the state power to suppress Chinese companies.”

The license suspensions by the U.S. Commerce Department, first reported by Reuters, show the Biden administration has taken action against SMIC amid rising pressure from Republican China hawks to stem the flow of U.S. technology to the company and degrade its ability to make sophisticated chips.