Reports of Huawei’s chip breakthrough are “incredibly disturbing,” says Commerce Secretary Gina Raimondo.
The chip was manufactured by China’s Semiconductor Manufacturing International Corp. (SMIC), a firm placed on a U.S. trade restriction list called the Entity List in 2020. Huawei was added to it in 2019. Companies on this list are prohibited from purchasing and using U.S.-based technology.
U.S. officials and market analysts have wondered how the company successfully developed the chip and joined Apple and Samsung by producing its own smartphone processor without access to vital technologies. The news led the Commerce Department to launch an official probe into Huawei’s made-in-China chip.
Appearing before a Senate Commerce Committee hearing on Oct. 4, Ms. Raimondo told lawmakers that the chip breakthrough is “incredibly disturbing.” The recent development suggests that her department requires additional methods to enforce the federal government’s export controls.
“We need different tools. We need additional resources around enforcement,” the secretary said. “We’re tough as we need to be, but we need more resources.”
She said that a legislative proposal floating in Congress would expand the Commerce Department’s authority regarding technology transactions that are considered national security risks.
Ms. Raimondo refrained from commenting on her department’s investigation into the new Huawei smartphone.
“The only good news, if there is any, is we don’t have any evidence that they can manufacture 7-nanometer [chips] at scale,” she said. “Although I can’t talk about any investigations specifically, I promise you this: Every time we find credible evidence that any company has gone around our export controls, we do investigate.”
“The companies offer services in wastewater and environmental protection processes, and they are not involved in critical technology,” Taiwanese Economic Affairs Minister Wang Mei-hua told officials on Oct. 5.
The newest Huawei smartphone has been popular, with the company admitting that it’s “working extra hours” to satisfy soaring domestic demand.
TikTok in Focus
Ms. Raimondo also endorsed legislation extending the Commerce Department’s greater power to grapple with information captured by applications owned by foreign adversaries.Social media titan TikTok, owned by China’s ByteDance, has been the focal point of data concerns among lawmakers this year. U.S. officials are worried that China can access user data on the platform, which has between 100 million and 150 million American users.
“Certainly, TikTok poses national security risks, to be clear, but we need a comprehensive plan,” she said, noting that the issue is “bigger than TikTok.”
In March, FBI Director Christopher Wray warned that the Chinese Communist Party could exploit TikTok to access or control data from U.S. users.
“This is a tool that is ultimately within the control of the Chinese government—and it, to me, it screams out with national security concerns,” Mr. Wray said at a Senate Intelligence Committee hearing.
During the hearing, other leading intelligence officials agreed with Mr. Wray that TikTok posed threats to national security.
Last year, the U.S. government enacted a law prohibiting the use of TikTok on government devices by roughly 4 million federal civil servants. Many states have instituted total or partial bans of TikTok on government devices.
This past spring, TikTok CEO Shou Zi Chew told U.S. lawmakers that the company collects a lot of data, but the social network has never shared data with Beijing or stored the information in China. However, he conceded that China-based employees at its parent company can still access U.S. data from the app.
“TikTok has never shared, or received a request to share, U.S. user data with the Chinese government. Nor would TikTok honor such a request if one were ever made,” he said in written testimony. “Let me state this unequivocally: ByteDance is not an agent of China or any other country.”
