How Did SK Hynix's Chips End Up In New Huawei Smartphone?

US lawmakers have been infuriated with Huawei Technologies Co.'s ability to produce a new smartphone with a cutting-edge processor despite mounting US sanctions. The inquiry into Huawei's Mate 60 Pro started when Bloomberg hired TechInsights to conduct a complete teardown of the smartphone, which released the report earlier this week. 

Huawei uses an advanced 7-nanometer processor built by China's top chipmaker, Semiconductor Manufacturing International Corp. But another report from TechInsights shows memory and flash in the Mate 60 Pro comes from SK Hynix Inc. 

Bloomberg said Mate 60 Pro's components are almost entirely sourced from domestic suppliers, "and Hynix's hardware is an isolated example of materials sourced from overseas, according to TechInsights." 

South Korea-based Hynix told Bloomberg that it "no longer does business with Huawei since the introduction of the US restrictions against the company and, with regard to the issue, we started an investigation to find out more details." 

The mystery of how Huawei sourced the memory chips deepens, as Hynix said it "is strictly abiding by the US government's export restrictions." 

Bloomberg offers some ideas of how Huawei might have procured the Hynix chips: 

"Huawei may have procured the memory chips from Hynix, whose Chinese base cranks out an estimated one-third to half of its DRAM for global markets. One possibility is that Huawei may be tapping a stockpile of components it accumulated as far back as 2020 before the full set of US trade curbs had been imposed on it. International suppliers of advanced technology have been prohibited from supplying Huawei over the past three years by US trade curbs, implemented on fears of the hardware being used to aid China's military."

News of the Bloomberg/TechInsights report enraged some US lawmakers who have spent the last several years slapping China with sanctions to curb its progress in chip technology. Representative Mike Gallagher, chairman of the House Select Committee on Competition with China, said Wednesday the US should end all its exports to both Huawei and SMIC: 

"The time has come to end all US technology exports to both Huawei and SMIC to make clear any firm that flouts US law and undermines our national security will be cut off from our technology." 

How Huawei obtained the memory chips from Hynix remains unclear. However, given this week's developments, US lawmakers will likely not be done imposing tech sanctions on Beijing.