SEMICONDUCTOR Manufacturing International Corp. (SMIC), China’s largest and most important chipmaker, has likely advanced its production technology by two generations, defying U.S. sanctions intended to halt the rise of the firm.

Shanghai-based SMIC is shipping Bitcoin-mining semiconductors built using 7-nanometer technology, industry watchers TechInsights wrote in a blog post Tuesday. That’s well ahead of SMIC’s established 14nm technology, a measure of fabrication complexity in which narrower transistor widths help produce faster and more efficient chips.

Since late 2020, the United States has barred the unlicensed sale to SMIC of equipment that can be used to fabricate semiconductors of 10nm and beyond.

SMIC’s progress raises questions about how effective the U.S. export control mechanism has been and whether Washington can indeed thwart China’s ambition to foster a world-class chip industry at home and reduce reliance on foreign technologies.

The U.S. restrictions effectively derailed Huawei Technologies Co.’s smartphone business by cutting it off from the tools to compete at the cutting edge — but that company is now quietly staffing up a renewed effort to develop its in-house chipmaking acumen.

Previously, SMIC has said that its core capabilities stand at 14nm, two generations behind 7nm, which in turn is roughly four years behind the most advanced technology available now from Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. The company has worked with clients on technologies more advanced than 14nm as early as 2020, it said on an earnings call that year.

China-based MinerVa Semiconductor Corp., which is named as SMIC’s customer in the TechInsights report, showcases a 7nm chip on its website and said mass production began in July 2021, without specifying the manufacturer.

The Trump administration blacklisted SMIC about two years ago on “national security” concerns, citing the company’s ties with the Chinese military, an allegation the chipmaker has denied.

Following Washington’s move, U.S. equipment suppliers have been banned from providing SMIC with gear “uniquely required” to produce 10nm or more advanced chips without licenses, although it is not clear exactly what the U.S. Department of Commerce has allowed firms to sell to SMIC since.

SMIC has said that its blacklist status hurts its ability to develop sophisticated technologies. The company’s capability is severely curbed by its lack of access to ASML Holding NV’s extreme ultraviolet lithography (EUV) systems, which are required to make the most advanced chips that include 5nm and 3nm geometries.

The Dutch firm has not shipped a single EUV machine to the Chinese mainland because of U.S. pressure on the Dutch government. (SD-Agencies)