U.S. Commerce Secretary Gina Raimondo recently stated that chips used by the Chinese company Huawei in their earlier Mate 60 Pro smartphone are not as advanced as those produced in the United States.

According to a report from Reuters, Huawei has been under trade restrictions since 2019, surprised the global industry and the U.S. government in August 2023 by unveiling a new smartphone featuring advanced chips. Despite Washington’s ongoing efforts to weaken China’s capabilities in advanced semiconductor research and production, the Huawei Mate 60 Pro is still regarded as a symbol of technological breakthrough in China.

Following the release of the chips used in the Mate 60 Pro, many believed that Gina Raimondo’s efforts to restrict Chinese semiconductors were futile. However, Gina Raimondo recently refuted this viewpoint. She pointed out that the new chips introduced by Huawei are not as capable and lag behind U.S. chips by several years in performance, indicating that U.S. export controls on China are effective.

The same report indicates that Washington has been striving for years to weaken China’s capabilities in advanced chip production and the manufacture of equipment required for these chips. The concern is that these chips could be used to enhance China’s military capabilities, with Huawei being a key player.

Therefore, after Huawei was placed on the U.S. government’s Entity List for export control in 2019, related U.S. suppliers struggled to obtain licenses to ship goods to Huawei. Notably, the sources cited in the report cited by Reuters on March 12th once stated that Intel’s competitor, AMD, had applied for a similar license to sell comparable chips in early 2021 but did not receive approval from the US Department of Commerce.

Nevertheless, Intel has been granted licenses worth billions of dollars to continue selling products to Huawei. Additionally, Huawei has also launched its first artificial intelligence notebook featuring Intel chips this month, leading to further controversies. Moreover, as per reports from The Register, Intel is reportedly preparing to follow in NVIDIA’s footsteps by developing “special edition” versions of its AI acceleration chips, Gaudi 3, for the Chinese market.

When asked if the White House’s stance on business with China is tough enough, Gina Raimondo emphasized the need for accountability from companies and everyone alike. She acknowledged that it wasn’t popular with suppliers when she told them they couldn’t sell semiconductor products to China, but ultimately she made that decision.

The emergence of the new generation of Huawei smartphones has also prompted the US administration to conduct dismantling reviews and gain insights into the technology details behind the chips, which are the most advanced semiconductors produced by China to date. However, few details about the related review have been disclosed.

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Micron, the largest memory manufacturer in the United States, is expected to receive over USD 6 billion in funding from the Department of Commerce to assist with the costs of local factory projects, as part of efforts to bring semiconductor production back to U.S. soil.

According to a report from Bloomberg, sources revealed that the funding has not been finalized yet and could be announced as soon as next week. It is still unclear whether Micron plans to seek further loans through the “Chip Act” in addition to direct funding.

Micron Technology, the U.S. Department of Commerce, and representatives from the White House all declined to comment on the reported funding.

The U.S. “Chip Act” provides semiconductor companies with USD 39 billion in direct funding and USD 75 billion in loans and loan guarantees to revitalize the U.S. semiconductor manufacturing industry, which has shifted production to Asia over the past few decades. U.S. Commerce Secretary Gina Raimondo stated that approximately USD 28 billion of this funding will be allocated towards advanced manufacturing processes.

So far, the Department of Commerce has announced six grants, with three provided to established semiconductor companies. Specifically, TSMC received USD 6.6 billion USD, Samsung received USD 6.4 billion, and Intel received USD 8.5 billion.

As per the same report from Bloomberg, Micron has committed to building up to four factories in New York and one in Idaho. However, Micron CEO Sanjay Mehrotra emphasized in March that these plans require Micron to obtain sufficient chip subsidies, investment tax credits, and incentives to address the cost differentials compared to expanding overseas.

Raimondo previously stated that the Department of Commerce will prioritize funding projects that commence before 2030. Per to previous documents from Micron cited by Bloomberg, among the four planned factories in New York, only two new factories may meet this requirement, with the other two not expected to start operations until 2041. Insiders suggest that this could mean that Micron’s subsidies may only support the first two factories in New York.

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On April 15th, during the Member Representatives Symposium of the World Internet Conference, Jiang Tao, Vice President of Intel, and Mark Murphy, Executive Vice President and CFO of Micron, expressed their respective views on the theme “Interconnection, Mutual Benefit, and Common Prosperity — Building a Community of Shared Future in Cyberspace”, and discussed future development of international organizations and industry hot topics with other member representatives.

• Micron to Continuously Cultivate the Chinese Market and Jointly Shape the Future of the Global Semiconductor Industry

Having been rooted in China for over 20 years, Micron has established close cooperation with its customers.

On March 27, 2024, Micron announced that its new packaging and testing plant in Xi’an had officially broken ground, further strengthening the company’s unwavering commitment to operations, customers, and communities in China. Micron also announced at the groundbreaking ceremony that it will establish its first sustainable Center of Excellence (CoE) for packaging and testing in Xi’an.

In June 2023, Micron announced an additional investment of CNY 4.3 billion in Xi’an, inclusive of the construction of this new plant, introduction of new production lines, and the production of a wider range of product solutions, including but not limited to mobile DRAM, NAND, and SSD, with an aim to expand the existing DRAM packaging and testing capabilities in Xi’an.

Mark Murphy expressed that Micron is deeply rooted in China and has been committed to achieving multi-level development in China for a long time. Micron’s investments in China is a testament of its confidence in the Chinese market, strong semiconductor ecosystem, and high-quality talent. Down the road, it will continue to provide support for its customers and for the innovation in the broader semiconductor ecosystem in China.

• Intel: China Has many Conditions to Attract Global Enterprises

Currently, AI technology enjoys burgeoning growth, empowering various industries.

Intel’s VP Jiang Tao pointed out that China boast a vast market, resilient supply chain, numerous innovative application scenarios, and rich multi-level, high-quality talent resources, which are attractive to all global companies.

He expects that international organizations at the World Internet Conference can play a leading role in promoting AI technology and applications, consolidating industry consensus, and promoting full exchange among government, industry, academia, and relevant professionals in the latest developments and future trends of AI industry.

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(Photo credit: Intel)

The US government announced on April 15th that it will provide up to USD 6.4 billion in subsidies to South Korean semiconductor giant Samsung Electronics for expanding advanced chip production capacity at its Texas plant.

The US government previously approved subsidies of up to USD 8.5 billion for US chip giant Intel and USD 6.6 billion for TSMC to alleviate future semiconductor supply constraints. Semiconductors are currently considered the lifeblood of the global economy.

The Department of Commerce stated in a release, “…the U.S. Department of Commerce and Samsung Electronics (Samsung) have signed a non-binding preliminary memorandum of terms (PMT) to provide up to $6.4 billion in direct funding under the CHIPS and Science Act.”

The statement also mentioned that Samsung Electronics is expected to “invest more than $40 billion dollars in the region in the coming years, and the proposed investment would support the creation of over 20,000 jobs.”

US officials told reporters that this subsidy from the “Chips and Science Act” would assist Samsung Electronics in expanding chip production for use in aerospace, defense, and automotive industries, enhancing US national security.

Lael Brainard, the Director of the White House National Economic Council, emphasized that the resurgence of advanced chip manufacturing in the United States signifies a significant milestone for the domestic semiconductor industry.

US Commerce Secretary Gina Raimondo indicated that this subsidy would support two chip production facilities, one R&D fab, and one advanced packaging facility. She mentioned that this subsidy would also help Samsung expand its semiconductor facility in Austin, Texas.

Raimondo further stated, “…this proposed funding advances America’s leadership in semiconductor manufacturing on the world stage.”

Previously, the U.S. government announced that Intel would receive USD 8.5 billion in federal subsidies and USD 11 billion in loans. Intel is planning to invest USD 100 billion across four states in the U.S. for building and expanding fabs, and is also seeking an additional USD 25 billion in tax credits.

On the other hand, US administration is set to provide USD 6.6 billion in aid to TSMC, which plans to build a third chip plant in Arizona with a total investment of USD 65 billion.

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The US Department of Commerce has added leading Chinese solution provider Sitonholy, who primarily sells processors from Intel and NVIDIA, to its Entity List. This inclusion on the Entity List undoubtedly impacts Sitonholy but also has significant implications for American companies like Intel and NVIDIA.

According to reports from the South China Morning Post and Reuters, Sitonholy sells hardware based on Intel and NVIDIA technologies and also provides cloud services. As a result, US companies engaging in business with Sitonholy require export licenses from the Department of Commerce, but these license applications are presumed to be denied during the review process.

This development is a significant blow to Sitonholy and American companies alike. Kevin Kurland, a US export enforcement official, stated during a hearing of the US Senate subcommittee that the US government has placed four Chinese companies on an export blacklist for assisting the Chinese military in obtaining AI chips. The four Chinese companies are Linkzol Technology, Xi’an Like Innovative Information Technology, Beijing Anwise Technology, and Sitonholy.

A Chinese Foreign Ministry spokesperson criticized the United States for unfairly targeting Chinese companies through export controls and demanded that the US stop politicizing trade and technology issues.

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