Lawmakers Call for Ending Flow of Chipmaking Equipment to Firms Tied to Huawei

The leaders of the House Select Committee on China urged the Commerce Department Oct. 16 to restrict exports of U.S.-made semiconductor manufacturing equipment (SME) to Huawei's “clandestine network” of companies.

In a letter to Commerce Secretary Gina Raimondo, committee Chairman John Moolenaar, R-Mich., and ranking member Raja Krishnamoorthi, D-Ill., said China's Huawei, which has been on Commerce's Entity List since 2019 (see 1905160072), is circumventing export controls on U.S. chips by making its own chips with American equipment acquired by its clandestine network. While one of the companies in the network, PXW Semiconductor, is on the Entity List, many others are not, including PXW “sister companies” Pengxinxu, SwaySure Technology and Qingdao SiEn, even though their ties to Huawei have been described in news reports.

“Just as you have taken steps to prohibit Huawei from purchasing U.S. chips, it is similarly important and logical to restrict the flow of SME to prevent Huawei from fabricating its own chips," the lawmaker wrote. "Restricting the flow of SME to Huawei’s clandestine network of semiconductor companies will send an important signal to both [China] and Huawei that the United States will take appropriate action to prevent U.S. technology from enabling its problematic technology ambitions."

Taking such action would "also demonstrate to our allies and partners the seriousness and fairness with which the U.S. government executes its export control policy," the lawmakers added. Failing to act, they said, would "only benefit a small group of American companies producing SME at the expense of chipmakers worldwide who cannot sell their chips, undermining the intent of the Huawei listing."

Commerce had no immediate comment on the letter.