US may also sanction those involved in Huawei’s secretive chip network

The US Government intends to escalate Washington’s chip wars strategy. Bloomberg claims that sanctions are imminent against a number of Chinese semiconductor companies linked to tech giant Huawei.

Leaked reports show that the Chinese companies or entities under scrutiny include some that were highlighted last year in allegations that Huawei was trying to set up a secret network of factories to combat US sanctions against it.

These allegations came from the Semiconductor Industry Association (SIA), the trade body for US chipmakers. Huawei is said to have taken over two existing chip factories and built at least three more under other companies’ names to hide its involvement.

This could allow Huawei to circumvent the restrictions and indirectly purchase chip manufacturing equipment or other materials that would otherwise be prohibited to it.

The allegations have not been confirmed, and the SIA issued a statement saying that these reports, based on a presentation, contained some errors.

The last move has broken ties

According to Bloomberg, companies that could be blacklisted include chipmakers Qingdao Si’En, SwaySure and Shenzhen Pensun Technology Co. Citing unidentified sources familiar with the matter, the report suggests that final decisions have not yet been made.

Huawei has always denied posing a security risk to networks outside China, while the US has claimed potential backdoor access to mobile networks.

Huawei has been operating under the weight of US sanctions since former president Donald Trump blacklisted the company in 2019, claiming its telecom and IT kit posed a threat to national security. The company also withdrew its public and government relations teams from the United States earlier this year in a sign of strained relations.

Earlier this month, it emerged that the Biden administration had pressured photolithography giant ASML to maintain and repair chip manufacturing equipment previously sold to customers in China, and in February more than a dozen Chinese technology companies were added to a list of entities allegedly working for the military by the Department of Defense (DoD).

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