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Huawei’s Chip Developments Pose Challenge to US Tech Restrictions

by Rahil M
0 comment

Huawei, based in Shenzhen, opted for a low-key release of its flagship device, but the news quickly spread across social media platforms as patriotic sentiments swept through platforms like Weibo. The Mate 60 Pro’s chip and fast wireless capabilities became a source of national pride among Chinese consumers.

The United States is actively pursuing comprehensive information regarding Huawei Technologies Co.’s recent advancements in chip technology, which have triggered a surge in Chinese nationalism and raised questions about the effectiveness of Washington’s restrictions on China’s technology sector.

US National Security Advisor Jake Sullivan addressed the matter on Tuesday, expressing the government’s keen interest in the exact composition of the processor used in Huawei’s Mate 60 Pro. A teardown analysis conducted for Bloomberg News recently revealed that this processor lags just a few years behind the current generation and is manufactured by the US-blacklisted Semiconductor Manufacturing International Corp (SMIC).

Sullivan’s remarks break Washington’s previous silence on the issue, which arose when Huawei quietly released its Mate 60 pro handset last week during a visit to China by US Commerce Secretary Gina Raimondo. Chinese state-backed media has since hailed this revelation as a significant breakthrough in reducing reliance on American technology. The Economic Daily even characterized it as “China Essence,” playing on the similarity between the Chinese words for “chip” and “heart.”

Sullivan, during a White House briefing, stated, “I’m going to withhold comment on the particular chip in question until we get more information about precisely its character and composition.” However, he emphasized that regardless of the chip’s specifics, the United States should maintain its approach of “small yard, high fence” technology restrictions focused primarily on national security concerns rather than broad commercial decoupling.

Both Huawei and SMIC have been subject to US sanctions preventing them from accessing advanced chipmaking technology and equipment, amid concerns of potential military applications by China. The Mate 60 Pro, featuring a 7nm Kirin 9000s processor, represents an initial step toward Beijing’s goal of reducing its dependence on American technology. Some analysts have even suggested that if Huawei can produce this device at scale, it could pose a threat to Apple Inc.’s iPhone sales in China.

Huawei, based in Shenzhen, opted for a low-key release of its flagship device, but the news quickly spread across social media platforms as patriotic sentiments swept through platforms like Weibo. The Mate 60 Pro’s chip and fast wireless capabilities became a source of national pride among Chinese consumers.

The phone’s release had a ripple effect, boosting Chinese chipmaking suppliers and sparking interest in companies linked to Huawei’s development of an indigenous processor. Analysts, including Edison Lee of Jefferies, have speculated that a mass-produced version of the Mate 60 Pro could significantly impact sales of Apple’s next-generation iPhone, potentially by as much as 38%.

Ajit Manocha, CEO of industry group SEMI, commented on the strategic importance of the semiconductor industry on a global scale. He noted that given ongoing geopolitical tensions, nations worldwide are striving to stabilize and enhance their semiconductor operations, highlighting China’s multi-year efforts in this regard.

While the United States has repeatedly emphasized a desire to mitigate risks rather than fully decouple from China, the government’s response to breaches of technology restrictions will be closely watched. The Biden administration has made efforts to engage with Beijing and reduce tensions between the two major world economies and military powers, although recent visits by senior officials have yet to yield significant results.

Lin Tsung-nan, an electrical engineering professor at National Taiwan University, commented on the situation, saying, “Huawei is testing the US red line now. If the US doesn’t take any action, Huawei will think there’s nothing to be afraid of, and its other suppliers will emulate what SMIC does, and US sanctions will crumble.” The ongoing developments related to Huawei’s chip technology and the US response are being closely watched as the technology sector remains at the forefront of US-China relations.

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