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China cracks advanced microchip technology in blow to Western sanctions

China has cracked a microchip design method previously only mastered by the West, in a challenge that could undermine sanctions.

Patent filings show that Huawei has made advances on a crucial chip-making method, raising the prospect that the company could eventually start making some of the tiniest and most powerful microchips in-house.

Such a development would allow Beijing to circumvent Western sanctions. Washington, Brussels and London are all currently blocking access to advanced Western-made computer chips in China over fears the communist nation could develop new military capabilities beyond the resilience of Western armies.

Huawei’s patent application, filed in November but only revealed to the world public this month, describes a way to use ultraviolet light to etch the inner workings of a computer chip into a piece of silicon.

With so-called extremes Ultraviolet lithography (EUV) technology can be used to produce transistors that are only nanometers in size. The most powerful computer chips contain millions of transistors, and advances in miniaturization enable the creation of extremely powerful chips.

The highly specialized technology has so far only been cracked by the Dutch company ASML. The chip-making secrets of ASML, a €208 billion deal, are jealously guarded by both the company and the West.

Dutch Foreign Trade Minister Liesje Schreinemacher told the country’s parliament in November that ASML’s chip technology was a jewel in the country’s crown to be protected.

US trade sanctions imposed on China this summer specifically targeted EUV technology imports.

According to Bloomberg, Dutch officials have been urged by the US to refuse export licenses to China.

The news that local champion Huawei has found a way to develop the chips itself is likely to raise alarms among Western officials.

Huawei did not respond to a request for comment.

EUV machines cost between $150 and $300 million each and are about the size of a London bus. Factories typically require between 9 and 18 machines, pushing the cost of new chip fabs well into the billions.

ASML’s microchip manufacturing machines are used by the world’s leading chipmakers such as Intel, Samsung and Taiwanese chip giant TSMC. In January 2022, Intel ordered five EUV machines to help equip a new chip fab.

Separately, Huawei said on Friday that it was “back to normal business” after two years of disruption sparked by US sanctions.

In a year-end message, Chairman Eric Xu said the company had emerged from “crisis mode,” saying, “US restrictions are now our new normal and we are returning to normal business operations.”

Former US President Donald Trump imposed sanctions on Huawei in 2019, including a ban on using Google’s Android mobile operating system, which Huawei’s consumer smartphone division relied on.

Other western nations followed with similar bans, including an order by then-Prime Minister Boris Johnson to remove Huawei equipment from key UK telecoms infrastructure in 2020.

Restrictions were imposed over concerns that Huawei could be forced to work with Beijing and offer backdoor access to security communications systems.

Sanctions caused Huawei’s global revenue to fall by a third in 2021, but Mr Xu said Huawei’s 2022 sales are on track to remain at around 636.9 billion yuan (£76.6 billion).


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