Huawei’s chip dilemma 202008
The United States launches its “ultimate move”
The official websites of the U.S. Department of State and the Department of Commerce issued separate statements to further tighten restrictions on Huawei's access to U.S. technology and include Huawei's 38 subsidiaries in 21 countries and regions around the world on the entity list to combat Huawei's acquisition of commercial chips. The statement takes effect immediately. On the same day, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued a revised ban on Huawei (hereinafter referred to as the new ban). It is understood that several details have been added to the new ban. For example, products based on US software and technology cannot be used to manufacture or develop parts, components or equipment produced, purchased or ordered by any Huawei subsidiary (on the entity list). In addition, the regulations also restrict Huawei from participating in relevant transactions as a "buyer", "intermediate consignee", "final consignee" or "end user" in the entity list, provided that it must obtain permission.
After adding Huawei to the Entity List in May last year, the United States once again upgraded its restrictions on Huawei in May this year, intending to block TSMC from manufacturing chips for Huawei. According to regulations, after September 14, TSMC will no longer be able to continue to produce chips for Huawei.
The 38 new companies added to the entity list this time are mainly domestic and foreign subsidiaries of Huawei Cloud and Huawei OpenLab (Open Lab), as well as the Israeli IT company Toga Networks acquired by Huawei and Huawei Technologies' R&D company in the UK. Since May last year, the total number of Huawei subsidiaries included in the U.S. Entity List has reached 152.
Gu Wenjun, chief analyst of Xinmo Research, told a reporter from China Business Daily that the United States is "patching" Huawei's restrictive policy to completely block Huawei's possibility of obtaining chips. Huawei's previous idea of obtaining chip supply by purchasing external chips (non-Huawei HiSilicon) has failed and has a huge impact.
