Following the release of the Mate 60 Pro, a 5G capable phone with a 7nm chipset, by Huawei the U.S. Department of Commerce is being pressed on whether U.S. sanctions have been breached and if so how. Many security analysts previously believed that it would be impossible for a Chinese company to design and manufacture a chip below 14nm under current sanctions. Now these same analysts are calling for an investigation and more sanctions if needed. The goal of this report is to ascertain how a 7nm chip was produced in China, what additional sanctions might be passed, and why the U.S. views semiconductors as a national security threat. This report includes the background, interviews with experts from the Semiconductor Industry Association and SemiAnalysis, a breakdown of TechInsight’s Mate 60 teardown, and our analysis which includes a list of potential sanctions.