Blacklisted Chinese Tech Giant Building Shadow Network Of Factories To Evade US Sanctions

Blacklisted Chinese Tech Giant Building Shadow Network Of Factories To Evade US Sanctions

Will Kessler on August 23, 2023

An association of top semiconductor companies alleged that a Chinese manufacturer in the industry is constructing a network to skirt U.S. restrictions, according to Bloomberg.

The Semiconductor Industry Association (SIA) alleged that Huawei Technologies Co. is secretly constructing a network of semiconductor-fabrication facilities throughout China in order to evade U.S. restrictions on the Chinese semiconductor industry, according to Bloomberg. Huawei was prohibited from working with American companies after being put on the entity list in 2019 by the Department of Commerce.

“Given the severe restrictions placed on Huawei, Fujian Jinhua, PXW and others, it is no surprise that they have sought substantial state support to attempt to develop indigenous technologies,” the Bureau of Industry and Security (BIS) told Bloomberg. “BIS is continually reviewing and updating its export controls based on the evolving threat environment and, as evidenced by the Oct. 7, 2022 rules, will not hesitate to take appropriate action to protect US national security.”

In October 2022, the Biden administration imposed new restrictions on the semiconductor industry, blacklisting multiple Chinese companies from accessing and illegally copying sensitive U.S. technology related to the chip sector.

Semiconductors power nearly everything in our lives. But they were hard to access during the pandemic because factories overseas shut down.

Thanks to the CHIPS and Science Act, companies are investing billions of dollars to bring production back home.

This is a game changer. pic.twitter.com/kJR6z3Pm4g

— President Biden (@POTUS) August 13, 2023

Huawei has received an estimated $30 billion in state funding after venturing into the semiconductor industry last year, according to Bloomberg. The telecommunications giant has already acquired at least two plants and is in the process of building at least three others in its covert network.

Huawei is reportedly operating the plants under different company names in an attempt to fool suppliers who may not recognize who they are dealing with, according to Bloomberg.

China and the U.S. are currently competing in the semiconductor and artificial intelligence industries, with the U.S. leveraging its intellectual property while China leverages its access to raw resources that are necessary to build computer chips.

The U.S. placed further restrictions on the industry in August, barring investments in some Chinese companies that are involved in the semiconductor, quantum computing and artificial intelligence sectors.

The BIS, Huawei and the SIA did not immediately respond to the Daily Caller News Foundation’s request for comment.