Washington Set To Launch Probe Into Huawei's Recent Cutting-Edge Mobile Phone Technology

The latest smartphone from Huawei Technologies Inc. is causing ripples of concern within Washington circles as it appears to use technology the U.S. has been aiming to restrict from China.

This development could potentially hamper the ongoing efforts by the Biden administration to mend relations with Beijing.

What Happened: Despite being under the radar of U.S. sanctions and export controls, Huawei unveiled a new mobile phone that is raising doubts over the effectiveness of U.S. strategies to limit China’s tech sector, as reported by Bloomberg News.

The newly launched Mate 60 Pro features a 7-nanometer processor, an advancement over the 14-nanometer limit the U.S. wishes to uphold for China, although it still falls short of the latest iPhone chips.

Now the U.S. government, perturbed by this development, is believed to be preparing for an investigation into the phone, according to insights from Bloomberg.

The task, likely to be spearheaded by the Commerce Department's Office of Export Enforcement, will aim to establish whether the phone's processor, crafted by China's Semiconductor Manufacturing International Corporation, was built utilizing U.S. tools or technology.

See Also: From Elon Musk’s ‘Ugh’ To Dogecoin Co-Creator’s Call-Out: YouTube’s Ad Control Changes Under Fire

This incident has led to a questioning of the effectiveness of the current controls while the Biden administration is trying to limit China’s access to high-end semiconductors.

Depending on what the investigation reveals about any potential violations, there may be a need to tighten restrictions or alter policies on Huawei, potentially including the denial of new licenses and the revocation of existing ones.

The VanEck Semiconductors ETF SMH fell over 2% on Thursday, with Qualcomm Inc. QCOM leading losses, down over 7%.

The specific actions will be determined only post the completion of the investigation and once more information on how Huawei and SMIC crafted the chips is available.

This episode has already drawn criticism from House Republicans, who are calling for stronger actions and answers from the Commerce Department's Bureau of Industry and Security.

The news of Huawei’s technological advancement has exposed the loopholes in the export controls and ignited concerns over China’s potential dominance in the semiconductor market. Experts are warning about the security implications of such an eventuality.

Read Next: Peter Thiel, Mark Cuban and Warren Buffet funded early-stage startups and made millions. You don't need to be a well-connected billionaire to do the same. Click here to invest in promising startups today.