Huawei is now cut off from advanced semiconductors. What happens next?
As of September 15, any manufacturer selling products globally that may eventually be sold to Huawei needs to get a license from the U.S. government. At least eight companies have applied, but will any get approved?
Huawei’s day of reckoning is here. Yesterday, the most expansive U.S. Commerce Department restrictions yet on the company’s supply chains went into effect.
- The new rules, announced last month, require any manufacturer selling products globally that may eventually be sold to Huawei to get a license from the U.S. government.
- They are widely regarded as an existential threat to China’s leading telecom company.
At least eight companies have applied for waivers to continue supplying to Huawei, per Caixin and Focus Taiwan:
- Qualcomm and Micron in the U.S.
- Samsung and SK Hynix in South Korea.
- MediaTek, Macronix, and Nanya in Taiwan.
- SMIC in China.
“No company had announced that its application was successful as of Wednesday afternoon Beijing time,” Caixin reports.
Not on the list: TSMC, the leading semiconductor manufacturer in Taiwan, which could supply the cutting-edge 7-nm Kirin 810 chip that Huawei requires for its smartphones, but which no company in China is advanced enough to make, per TechNode.
Huawei is stocked up, for now — “TSMC and MediaTek, for example, saw revenue grow 26% and 31% respectively during the period from June to August” largely due to a spike in orders from Huawei, Caixin notes — but the chairman of one company, Macronix, “thought there was little chance that the company’s application would be approved by the U.S. government before the country’s general election in November.”
Chip wars in the U.K.
On another front in the war for the world’s chips, the American technology company Nvidia has proposed a $40 billion deal to take over Arm, a British semiconductor company, and as with similar multinational deals, it first requires a sign-off from major regulators, including in Beijing.
Beijing could reject or delay the deal because of the risk of allowing more high-tech supply chains to be influenced by American regulators. The Financial Times reports:
- “Look at how the U.S. is treating Huawei. If Arm is acquired by a U.S. company, everyone will be worried,” a representative of the Beijing Semiconductor Association told local media.
- “The possibility that Arm could be politicized as a U.S. technology weapon against China’s technology companies must be taken seriously,” the nationalistic Global Times state media tabloid also warned in an editorial, citing the experience of Huawei.
- “Will it still find a way to provide us with IP after being acquired? I have to say I’m a bit worried,” an employee at Huawei’s HiSilicon chip design division told the FT.
More Huawei and chipmaking-related news:
- Japanese chipmakers scramble to replace Huawei sales after U.S. ban / Caixin
- Arm China investor sues company, escalating CEO spat amid sale / Reuters
- Exclusive: Top Huawei executives had close ties to company at center of U.S. criminal case / Reuters
- Huawei and ByteDance look to Singapore as U.S. restrictions loom / The China Project
