U.S. restrictions on Huawei seem to have no end in sight. On August 17, the U.S. Commerce Department expanded its curb on the Chinese tech giant to cut off all its access to U.S. technology-backed components.
It also added another 38 Huawei affiliates to its economic blacklist, which indicates they are required to obtain a license from the U.S. Government when they “act as a purchaser, intermediate consignee, ultimate consignee, or end user.” “It basically blocks the way for Huawei to directly purchase chips from other chip manufacturers that use U.S. technology,” Jia Mo, an analyst at market research company Canalys, said. Richard Yu, President of Huawei’s consumer unit, said at a press conference on August 7 that this year may mark the last year of production for Huawei subsidiary HiSilicon’s Kirin high-end chips with U.S. limits on chip manufacturers.
Huawei was put on the U.S. Entity List in May 2019, and the successive sanctions since then have become a wake-up call for the company as well as the country to rethink the path of chip development. On August 4, the State Council rolled out an array of measures to buoy integrated circuits (IC) and software sectors, including tax breaks, financing support and international cooperation, so as to boost industrial innovation and improve the quality of development. “It showcases the government’s desire to build a globally competitive semiconductor sector, and will encourage companies to devote more resources to overcome technological bottlenecks,” Wang Peng, deputy head of the China Center for Information Industry Development, said. A 2006 book on China’s IC development notes that China’s top officials felt “astonished” after visiting Samsung’s IC production line in the Republic of Korea (ROK) in the 1990s and became more determined to push forward China’s IC industry.