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Huawei Technologies Co. and its partner Semiconductor Manufacturing International Corp. relied on U.S. technology to produce an advanced chip in China last year, according to people with knowledge of the matter.<\/p>\n
Shanghai-based SMIC used gear from California-based Applied Materials Inc. and Lam Research Corp. to manufacture an advanced 7-nanometer chip<\/a> for Huawei in 2023, the people said, asking not to be named as the details are not public.\u00a0<\/p>\n The previously unreported information suggests that China still cannot entirely replace certain foreign components and equipment required for cutting-edge products like semiconductors. The country has made technological self-sufficiency a national priority and Huawei\u2019s efforts to advance domestic chip design and manufacturing have received the backing of Beijing.<\/p>\n Representatives of SMIC, Huawei and Lam did not respond to requests for comment. Applied Materials and the U.S. Commerce Department\u2019s Bureau of Industry and Security, which is responsible for implementing export controls, declined to comment.\u00a0<\/p>\n Lauded in China as a major leap in indigenous semiconductor fabrication, last year\u2019s SMIC-made processor powered Huawei\u2019s\u00a0Mate 60 Pro<\/a>\u00a0and a wave of patriotic smartphone-buying<\/a> in the Asian country. The chip is still generations behind the top components from global firms, but ahead of where the U.S. hoped to stop China\u2019s advance.\u00a0<\/p>\n The machinery used to make it, however, still had foreign sources including technology from Dutch maker ASML Holding NV as well as the gear from Lam and Applied Materials. Bloomberg News\u00a0reported<\/a>\u00a0in October that SMIC had used equipment from ASML for the chip breakthrough.\u00a0<\/p>\n Leading Chinese chip equipment suppliers including Advanced Micro-Fabrication Equipment Inc. and Naura Technology Group Co. have been trying to catch up with their American peers, but their offerings are still not as comprehensive or sophisticated. China\u2019s top lithography system developer Shanghai Micro Electronics Equipment Group Co. still\u00a0lags a few generations behind<\/a>\u00a0what industry leader ASML is capable of.<\/p>\n SMIC obtained the American machinery before the U.S. banned such sales to China in October 2022, some of the people said. Both firms were among the American suppliers that began\u00a0pulling their staff<\/a>\u00a0from China after those rules went into effect and prohibited U.S. engineers from servicing some machines in the Asian country. ASML also told American employees to\u00a0stop working<\/a>\u00a0with Chinese customers in response to the U.S. curbs, but Dutch and Japanese engineers are still able to service many machines in China\u2014much to the chagrin of their American rivals.\u00a0<\/p>\n Companies are now prohibited from selling cutting-edge, U.S.-origin technology to either SMIC or Shenzhen-based Huawei. Both tech firms have been blacklisted by the U.S. for alleged links to the Chinese military, while Washington has been\u00a0tightening<\/a>\u00a0China\u2019s overall access<\/a> to chipmaking equipment and advanced semiconductors.\u00a0<\/p>\n Those trade curbs pushed Huawei and SMIC to pursue avenues for building a domestic chip supply chain, and the Mate 60 Pro marked a surprising advance in that effort.<\/p>\n After Huawei released the new phone, Washington launched a\u00a0probe<\/a>\u00a0into its processor and U.S. Commerce Secretary Gina Raimondo vowed the\u00a0\u201cstrongest possible\u201d<\/a>\u00a0actions to ensure national security. Meanwhile, Republican lawmakers have\u00a0called for<\/a>\u00a0the Biden administration to completely cut off Huawei and SMIC\u2019s access to U.S. technology.<\/p>\n Department of Commerce officials have\u00a0said<\/a>\u00a0they haven\u2019t seen evidence that SMIC can make the 7nm chips \u201cat scale,\u201d a point echoed by ASML\u2019s Chief Executive Officer Peter Wennink.<\/p>\n If SMIC wants to advance its technology without ASML\u2019s state-of-the-art extreme ultraviolet lithography systems, the Chinese chipmaker will not be able to produce chips at a commercially meaningful volume due to technical challenges, Wennink told Bloomberg News in late January.\u00a0<\/p>\n \u201cThe yield is going to kill you. You\u2019re not going to get the number of chips that you need to have high volume chip production,\u201d he said. ASML has not been able to sell its EUV systems to China as the Dutch government has not issued a license allowing those exports.\u00a0<\/p>\n The U.S., meanwhile, is\u00a0pressing allies<\/a>\u00a0including the Netherlands, Germany, South Korea and Japan to further tighten restrictions on China\u2019s access to semiconductor technology. That effort is proving controversial and meeting resistance in some countries, as it imposes limits on trade at a time that Chinese businesses are investing in equipment and computational power to compete in the artificial intelligence race.<\/p>\n Huawei may be China\u2019s most promising candidate<\/a> to develop AI chips to compete with the U.S. Industry leader Nvidia Corp.\u2019s CEO, Jensen Huang, in December\u00a0called the Shenzhen firm<\/a>\u00a0a \u201cformidable\u201d rival.\u00a0<\/p>\n<\/div>\n