U.S. Halts Shipments to Hua Hong Semiconductor, Hitting China’s AI Chip Capacity

Hua Hong Semiconductor is China’s second-largest chip foundry. Mature-node processes generate most of its revenue, but the company is also seen as an alternative to Semiconductor Manufacturing International Corp. for meeting Chinese demand for advanced chips. A U.S. blockade on equipment needed for its 7-nanometer production line would affect China’s AI chip supply and could weaken Huawei’s ability to diversify manufacturing risk.

The U.S. Commerce Department has asked several semiconductor equipment suppliers to suspend shipments to Hua Hong Semiconductor, according to the latest report, with restrictions focused on its 7-nanometer mass-production line. The report did not disclose the value of affected orders or the effective date of the directive. The move comes ahead of a Trump-Xi meeting scheduled for May and could delay Hua Hong’s expansion of advanced-process capacity.