Chinese Tech Firms Battle to Produce Advanced Chips Despite US Sanctions

Although the United States has spent the past few years limiting China’s access to American-made semiconductor chips, the East Asian nation seems to be producing advanced chips on its own. SMIC, the largest chipmaker in China, appears to be manufacturing advanced chips despite the U.S. sanctions.

Last year, the United States issued chip sanctions that prevented American companies from exporting computer chips to China to keep the country’s fledgling artificial-intelligence sector from growing. The export restrictions imposed new rules on sales reporting for different types of advanced chips, controls for the sale of advanced design software and chipmaking equipment to Chinese companies, and statutes to prevent Chinese companies from using foreign subsidiaries to access American chips.

However, it looks like China is manufacturing its own advanced chips via Semiconductor Manufacturing International Corporation (SMIC), the largest chipmaker in the country. Last year, Chinese tech giant Huawei launched a 5G smartphone called the Mate 60, which came equipped with an SMIC-manufactured microchip.

This left many pundits in Washington wondering how China managed to develop a microchip with 5G connectivity after being cut off from critical technologies. SMIC developed the chip using the 7-nanometer process, a highly advanced production technique in the semiconductor space.

A recent report from the Financial Times revealed that SMIC is now setting up alternate production lines for the manufacture of 5-nanometer chips for embattled tech company Huawei, suggesting that China is making progress in the semiconductor industry even though it has limited access to critical technologies. Although the 7 and 5-nanometer processes aren’t the latest technology, with Apple’s latest high-end smartphones featuring chips made via a 3-nanometer process, it is a sign that U.S. chip sanctions don’t seem to be working against China.

With political and economic tensions between China and the U.S. escalating in recent years, American officials have been doing all they can to prevent China from outcompeting the U.S. in the semiconductor and artificial intelligence sectors. U.S. officials put SMIC on a national trade blacklist in 2020 and have essentially locked SMIC out of supply chains for foreign technology that could accelerate its chip-making progress.

As a result, the company still cannot manufacture the most advanced chips. Continued action by the U.S., including stricter restrictions against the sale of semiconductor tools and AI chips to China, and pressuring its allies to adopt similar measures, has hobbled China’s chip-making sector even further.

Some experts say SMIC may be leveraging older chipmaking equipment to manufacture chips. Albright Stonebridge associate partner Paul Triolo notes that the company is now working with local chip makers, using its existing advanced lithography technology, and consulting external players such as Huawei to manufacture more advanced chips.

Other players in the Chinese tech field such as FingerMotion Inc. (NASDAQ: FNGR) are also coming up with various innovative mobile payment solutions and interventions in other verticals in ways that could revolutionize those segments.

NOTE TO INVESTORS: The latest news and updates relating to FingerMotion Inc. (NASDAQ: FNGR) are available in the company’s newsroom at

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