On October 16, 2024, the U.S. House Select Committee on the Chinese Communist Party alleged that Huawei was using a network of affiliated or state-linked semiconductor companies to maintain access to chipmaking capacity and technology despite U.S. export controls. The committee named Pengxinxu Technology, SwaySure Technology and Qingdao SiEn Integrated Circuits, among others. Its warning was a congressional allegation—not a court ruling that Huawei or every named supplier had broken the law.
What did the committee allege?
The bipartisan committee urged the Commerce Department to restrict U.S.-made semiconductor manufacturing equipment from reaching facilities it believed could support Huawei. It described the suspected arrangement as a “clandestine chip network” and said Huawei had “likely turned to other firms” after its Huawei-linked foundry PXW Semiconductor was placed on the Entity List in 2022. The committee’s October 16 letter and announcement drew on public reporting, corporate connections and site visits; the allegations were not a final legal finding.
The central concern was not only whether Huawei could buy finished chips directly. A chipmaker can also depend on manufacturing equipment, components, software, technical services, packaging and testing. If a restricted company can obtain those inputs through another firm or facility, controls aimed at the restricted company alone may not prevent production for its products or programs.
Which companies were named?
The committee identified several firms it believed were connected to Huawei’s semiconductor needs. The strength and nature of the alleged links differ, so being named should not be read as proof that a company was owned by Huawei or violated export-control law.
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| Company | What the committee said |
|---|---|
| PXW Semiconductor | A Huawei-linked semiconductor foundry in Shenzhen, placed on the U.S. Entity List in 2022. The committee said Huawei may have shifted to other firms after that designation. |
| SwaySure Technology | Described as a PXW sister company reportedly involved in advanced memory development for AI. The committee said it was understood to be ultimately controlled by Shenzhen Major Industrial Investment Group, which it also associated with PXW. It cited former Huawei executives and alleged supply-chain collaboration. These links were presented as reported or understood, not as a final finding of Huawei ownership. |
| Pengxinxu Technology | Identified as another company in the suspected network. The committee cited Chinese state media describing PXW, SwaySure and Pengxinxu as pillars of Shenzhen’s semiconductor development. |
| Qingdao SiEn Integrated Circuits | Named as a firm the committee believed was connected to Huawei’s semiconductor requirements. It later featured in the committee’s criticism of differences in export-control treatment. |
| SMIC | China’s leading foundry and a key participant in Huawei’s domestic advanced-chip effort, according to later committee materials. The committee discussed equipment and high-bandwidth-memory constraints on that effort. |
The committee’s October 2024 letter named Pengxinxu, SwaySure and Qingdao SiEn and said the network could include “potentially many others.”
How can a supplier network get around entity-based controls?
The U.S. Entity List restricts exports, reexports or transfers of items subject to the Export Administration Regulations to listed entities. The license requirements and review policies vary by listing and item; a listing is not a blanket prohibition on every transaction worldwide. This entity-by-entity structure can leave a gap when a company’s affiliates, suppliers or production facilities are not listed at the same time.
- A company is restricted directly. Huawei was placed on the Entity List in 2019, limiting its ability to obtain covered U.S.-origin goods and technology without required authorization.
- Another company seeks inputs in its own name. A non-listed supplier or facility may face different licensing requirements, depending on the item, end use and applicable rules.
- Manufacturing capacity supports a customer or program. Equipment, process support or components acquired by that company can help a fab produce chips or other outputs that may later serve Huawei-related needs.
- Regulators must establish the relationship and end use. Ownership, management, purchasing and production links can be difficult to trace, particularly when corporate structures and facilities change.
This is the distinction behind the committee’s claim: alleged circumvention of export controls through a wider network, not proof that Huawei simply bought restricted goods directly. A supplier can have state-linked investors or former Huawei employees without being legally controlled by Huawei; a fab can also be subject to some restrictions while still lawfully receiving other categories of goods.
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What did the TSMC-Sophgo episode show?
A separate 2024 episode offered a concrete example of how a chip ordered by one customer might end up in another company’s product. TechInsights reportedly found a TSMC-made chip inside Huawei’s Ascend 910B AI processor. Reuters reported that TSMC suspended shipments to China-based chip designer Sophgo after the discovery. The reporting described Sophgo as linked to Bitmain. The chip’s presence in a Huawei processor does not by itself establish that TSMC knowingly supplied Huawei; TSMC said it had not supplied Huawei since 2020. Reuters’ account of the shipment suspension concerns the reported chain of events, not a finding of TSMC’s intent.
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1Scan for outdated or missing drivers - takes under a minute2Repair Windows errors before they cause bigger problems3Fix the driver behind crashes, sound loss and screen glitchesIn January 2025, the Commerce Department added Sophgo and other entities to the Entity List in a broader action. That designation made the government’s concern more consequential, but it does not retrospectively prove that every earlier transaction involving Sophgo or another named company violated the law. Reuters reported on the blacklisting action.
Why do fabs and equipment suppliers matter?
Huawei’s post-restriction approach has involved chip design, domestic foundry production—particularly through SMIC—supplier and affiliate relationships, stockpiling and third-party procurement. Chinese equipment development and government-backed industrial investment are also part of the broader effort. But domestic chip production is not the same as complete technological independence: fabs may still need foreign equipment, materials, software, memory or production expertise.
A later Select Committee investigation shifted attention from individual Huawei-linked firms to the scale of China’s equipment purchases. It said Chinese semiconductor manufacturers bought about $38 billion of products and services from Applied Materials, KLA, Lam Research, ASML and Tokyo Electron in fiscal 2024, equal to roughly 39% of those companies’ combined worldwide revenue. The committee’s report framed the figure as evidence that China continued acquiring substantial equipment even as controls restricted some advanced tools. Its investigation explicitly did not claim that the five companies violated U.S., Dutch or Japanese law; the policy concern was that sales permitted under existing rules could still expand China’s semiconductor capacity.
The committee also reported different China-revenue shares for the five suppliers in 2024: Tokyo Electron 44%, Lam Research 42%, KLA 41%, and ASML and Applied Materials 36% each. These are figures attributed to the committee, not a finding that the revenue represented unlawful sales. The underlying full report sets out the investigation’s findings and qualifications.
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On December 2, 2024, the Commerce Department announced new controls that added some Huawei facilities to the Entity List and imposed controls on high-bandwidth memory. The Select Committee argued that the rule still left gaps because licensing treatment differed among facilities and companies, including SMIC Beijing, SMIC Shanghai, SMIC Shenzhen, SwaySure and Shenzhen Pengxinxu. Its criticism focused on carve-outs and differences in licensing policy, not on proof that every named entity continued to receive controlled items unlawfully. See the committee’s statement on the rule and its letter to BIS.
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In January 2025, the Sophgo designation followed the TSMC-chip discovery. By October 2025, the committee had broadened its argument to equipment sales across China’s semiconductor industry. Those later actions and reports show that the policy debate evolved; they do not establish that every concern raised in October 2024 was resolved, or that the same restrictions and licensing standards remained unchanged at every later date.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Did Huawei overcome U.S. restrictions?
The evidence supports a measured answer: Huawei adapted and continued developing and shipping advanced semiconductor products, but it has not been shown to have fully replaced the foreign technology, equipment, memory and production scale once available to it. The committee’s account points to a system of domestic manufacturing, related suppliers and procurement channels that can preserve some capability despite restrictions. It does not demonstrate that Huawei has unrestricted access to the most advanced manufacturing tools or that the controls have ceased to matter.
Production estimates illustrate the uncertainty around scale. The later committee report said U.S. government assessments put Huawei’s indigenous Ascend AI-chip production at no more than 200,000 units in 2025. Other press and industry estimates cited there ranged from approximately 250,000 to 800,000 Ascend 910Cs, depending on assumptions about stockpiled components and high-bandwidth memory. These are competing estimates, not a single verified production count; the committee’s report attributes and discusses them.
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What is proven, and what remains an allegation?
Several evidence levels should not be conflated when assessing claims of export-control evasion:
- Direct physical evidence: A chip reportedly found inside a Huawei processor is more concrete than a claim based only on proximity or common investors. It still does not, on its own, establish who knew the chip’s ultimate destination.
- Official restrictions: Placement on the Entity List confirms that the U.S. government imposed export-control requirements on a company. It is not automatically a finding that the company previously violated the law.
- Corporate and operational links: Shared management, investors, facilities or state ownership can support concern about coordination, but do not by themselves prove Huawei ownership or unlawful transfers.
- Potential end-use: A company’s equipment or products could support Huawei, but possibility is weaker evidence than a documented transaction or confirmed end user.
The October 2024 letter is strongest as a warning about the difficulty of policing distributed industrial relationships. It should not be read as a judicial determination against every company it mentioned.
What are the trade-offs in closing the gaps?
Narrow, entity-specific restrictions can target high-risk firms, preserve more ordinary trade and give regulators a clearer evidentiary basis. Their weakness is that corporate networks can be reorganized, newly created affiliates may not yet be listed, and different facilities can receive different licensing treatment.
Broader controls covering technologies, end uses or larger categories of equipment may be harder to evade through an affiliate. They also carry costs: lawful Chinese and multinational customers may lose access, U.S. and allied suppliers may lose revenue, and tighter restrictions could accelerate China’s domestic substitution efforts. Effective enforcement also depends on coordination with partners such as the Netherlands and Japan, whose firms make critical semiconductor tools.
The underlying policy choice is how much breadth is needed to prevent restricted end users from benefiting indirectly, while keeping controls enforceable and limiting unintended damage to lawful trade and allied cooperation.
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