Many Chinese semiconductor companies associated with Huawei are reportedly being considered for blacklisting by the Biden administration. 

This move would mark another escalation in the United States' efforts to contain and limit China's advancements in artificial intelligence (AI) and semiconductors.

Alleged Huawei Partners

Citing people familiar with the matter, Bloomberg reported that a presentation by the Washington-based trade group Semiconductor Industry Association revealed most of the Chinese entities that could be affected because they were identified as chipmaking facilities acquired or being built by Huawei.

Sources said no final decisions have been made yet. Chipmakers Qingdao Si'En, SwaySure, and Shenzhen Pensun Technology Co are among the companies that could be blacklisted.

The Biden administration is also considering sanctions against ChangXin Memory Technologies Inc., the leading memory chipmaker in China.

The insiders added that US authorities were considering sanctioning not only companies that produce chips but also Shenzhen Pengjin High-Tech Co. and SiCarrier, which make semiconductor manufacturing gear.

One of the sources told Bloomberg that the two companies are acting as proxies to help Huawei acquire restricted equipment.

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US-China Chip War

The US administration is putting pressure on its allies, including Japan, South Korea, the Netherlands, and Germany, to limit further China's ability to obtain semiconductor technology. Huawei is one of the companies at the center of that campaign, and Beijing's effort to lessen its dependence on Western technology.

According to the sources, it is unclear whether the US Commerce Department, which is in charge of the so-called entity list, had more proof connecting the businesses to Huawei. However, US authorities may sanction companies that pose a potential threat to US national security without requiring proof of prior wrongdoing.

As of 2019, Huawei can no longer buy American technology without obtaining a special export license from the Commerce Department. For years, those bans hurt Huawei's smartphone business. In August, the company showed off Mate 60, a device powered by a 7-nanometer chip made in China, and started selling it while Commerce Secretary Gina Raimondo was in the country.

Although Semiconductor Manufacturing International Corp. (SMIC) made the phone's processor, it still used many technologies developed elsewhere. For example, the tools used were from ASML Holding NV, a Dutch equipment giant, and US suppliers Applied Materials Inc. and Lam Research Corp. 

Despite Beijing's efforts to establish a full domestic semiconductor supply chain, the continued usage of these tools acquired before US and Dutch export controls went into effect shows that China still can not fully replace foreign components.

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