Huawei makes semiconductor chip advances, and the US could take more action

According to new reports, Huawei is shipping Chinese-made chips for surveillance cameras all over the world.

Huawei makes semiconductor chip advances, and the US could take more action
Pricing details of Huawei's Mate 60 Pro smartphones are seen on smartphones displayed at a Huawei store in Shanghai, China September 8, 2023. REUTERS/Aly Song/File Photo

The backstory: Last year, the US tightened export controls when it comes to advanced semiconductor chips, design software, chip manufacturing equipment and US-built parts of production equipment by restricting those sales to Chinese companies without a license. This move was mainly over concerns about how China could use this kind of tech to build up its military, saying it could be a national security risk for the US. The US also aimed to slow China’s progress in the tech sector and step up its own competition.

The US has also been saying that Chinese communications tech firm Huawei is a national security risk, citing reported links to the Chinese Communist Party and China’s military. But Huawei says that risk doesn’t exist. The US first blacklisted the Chinese tech giant in 2019 and since then has banned imports and sales of communications equipment from several Chinese companies, including Huawei.

More recently: Since the chip tech export ban was put in place, the Chinese tech industry has been trying to make up for this gap by developing its own high-tech semiconductors. And Huawei has been working to develop some of China’s most advanced chip technology. In August and earlier this month, the company launched a few new smartphones with advanced chips that analysts say have all been made domestically. They included high-tech 7-nanometer semiconductors thought to be made using less advanced Western lithography machines. As China works to catch up to the West without the most up-to-date manufacturing technology, this is a major step forward.

The development: According to new reports, Huawei is shipping Chinese-made chips for surveillance cameras all over the world. It started shipping these to surveillance camera makers this year, some Chinese but others international. Now, it’s also being said that Huawei designed its own processors for its advanced new 5G smartphone, the Mate 60 Pro, released in August. The US government has even launched an investigation into the phone.

Some analysts are saying that the Mate 60 Pro and other chips show that Huawei has access to electronic design automation (EDA) tools that "they are not supposed to have.” Will these new developments affect American export policy even more? Experts are saying that the US will probably put more tech export restrictions on China with these recent developments.

Key comments:

“Huawei’s new phone demonstrates that China is figuring out ways to limit the impact of sanctions, and this will necessitate tactical changes in U.S. export controls and other restrictions to achieve the same strategic goal,” said Matthew Bey, an analyst at U.S.-based geopolitics and intelligence firm RANE.

"We are trying to use every single tool at our disposal to deny the Chinese the ability to advance their technology in ways that can hurt us," said US Commerce Secretary Gina Raimondo on Tuesday.

"We don't know if [Huawei] got them illicitly, or more probably, the Chinese developed their own EDA tools," said TechInsights analyst Dan Hutcheson.

“There will be pressure on the U.S. to reconsider its export controls strategy, which was based on the assumption that controls would prevent Chinese companies from producing advanced-edge chips, while the business-as-usual approach would continue at the trailing-edge nodes. It is increasingly becoming clear that this distinction doesn’t work in reality,” said Pranay Kotasthane, deputy director of the Takshashila Institution.