The Huawei Chip

The Huawei Chip

The recent crackdown on Huawei Technologies by the US government has disclosed its impact on the global chip manufacturing industry. Chip manufacturing companies from the United States have come in the limelight to the Trump administration’s restrictions over the chip supply to Chinese technology giants. On Monday, the US Department of Commerce has announced the prohibition on Huawei on its acquisition of foreign-made chips and other electronic components. Though according to the legal experts, the new ban is considered as the extension of rules, and it fills the loopholes where American companies sell their products to third parties who can provide the products to Huawei.

The Huawei Chip

Unfortunately for Huawei, every company like Samsung, Qualcomm, Samsung, and Sony uses American software, chip design tools, materials, and intellectual property. According to the vice president of CCS Insight, Geoff Blaber, there is no access to key chips for Huawei. According to the report, American companies such as Cadence Design Systems, Synopsys and Ansys are presently the significant players in chip designing. In 2019, May, Huawei joined the US trade blacklist when China’s dependence on the US technology was disclosed. However, China achieved some success gradually like the recent breakthrough in the storage field. The Chinese companies depend on the American chip manufacturing equipment.

 

After the ban of Huawei, chip manufacturers suffered a lot

According to the report, Huawei’s major Asian suppliers fell after the US government developed the restriction rules on Huawei. Among all the Asian companies, mobile chip designing company MediaTek fell over 9% on the Taiwan Stock Exchange. MediaTek is the second largest mobile chip supplier in the world, and it is also regarded as the most important chip suppliers for Huawei’s smartphone business. It also works with Xiaomi, Oppo, Vivo, and Samsung. In a submitted document MediaTek mentioned they have been abiding by the global trade regulations and they are monitoring the changes in the US export control rules. They are also consulting the external legal experts for conducting the legal analysis.

Harry Clark, a partner at the US law firm Orrick, stated that new regulations are for the supply of foreign-made chips mainly that are designated for Huawei entities. He also mentioned these regulations could get applied to other semiconductors’ products. According to the report, the Chinese company has not given up yet on testing Qualcomm’s mobile chips on the upcoming smartphones, and they expect the United States can obtain a license in the future.