TMTPost -- Key U.S. lawmakers call for further restrictions on Huawei Technologies Co. suppliers by blocking their access to American chipmaking gear.

Credit：Xinhua News Agency

Chairman John Moolenaar, a Republican, and Ranking Member Raja Krishnamoorthi, a Democrat, of a House committees focusing on the Sino-U.S. competition Wednesday sent a letter to U.S. Commerce Secretary Gina Raimondo. In the letter, bipartisan Representatives urged the Commerce Department to continue taking action to address the national security threat of Huawei as the Chinese tech giant 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, 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.

“We must continue in our efforts to deny Huawei, and similar firms, the ability to access US technology,” wrote the two lawmakers.  Failing to restric the flow of SEM to HUawei’s “clandestine network of esmiconductor companies” would only benefit a small number of U.S. chip tool companies “at the expense of chipmakers worldwide who cannot sell their chips, undermining the intent of the Huawei listing, and harm our national security,” they said.

A Commerce Department spokesperson said later Wednesday they “have received the letter and will respond through the appropriate channels.”

The letter came on heels of a report that revealed the Biden administration is weighing expanding its export controls on AI chips to more countries and regions for fear of the exports could be diverted to China.

The U.S. government has discussed capping shipments of advanced AI chips from Nividia Corp. and other American companies on a country-specific basis, effectively setting a ceiling on export licenses for certain countries due to national security, Bloomberg cited people familiar with the matter.

The potential policy would reportedly build on a new framework to ease the licensing process for AI chip shipments to Middle East nations like Saudi Arabia, which are increasingly investing in AI data centers. Sales to Persian Gulf nations are not banned outright, but the suppliers of AI hardware are required to obtain special licenses for exports to these nations. The reported export caps will make nations in the region harder to obtain these license due to fears of they are being used to funnel sensitive AI technologies to China.