Has Huawei overcome U.S. sanctions by developing its own 5G chip?

Huawei, under tight US sanctions since 2019, started selling its latest Mate 60 Pro smartphone this week, raising speculation about its 5G capabilities. Some online reviews claim the device comes with the Kirin 9000s chip to support 5G and satellite calls.

The US and some European governments have labelled the Chinese giant a threat to national security, despite the company’s denial. Huawei had restricted access to US components and software, including from foreign chipmakers. Early this year, Japan and the Netherlands joined the US effort to curb the export of advanced semiconductors.

However, Huawei has been rumoured to be actively trying to overcome these sanctions to return to the 5G smartphone market, even resuming production on advanced chips with China’s Semiconductor Manufacturing International Corporation (SMIC).

If the Huawei Mate 60 Pro comes with its own 5G chip, that would mark a huge milestone for the Chinese smartphone giant. 

If that is the case, it would mark a “breakthrough” for China’s semiconductor industry and a major win for Huawei’s smartphone business.

Why does it matter?

Huawei’s development of its 5G chip may have implications for the tech industry, the global economy, and geopolitics. The smartphone launch coincides with US Commerce Secretary Gina Raimondo’s visit to Beijing, reiterating the Biden administration’s stance on export controls to China. If the new Mate 60 Pro is confirmed to have a 5G chip, that would mark a significant achievement for the Chinese tech champion.

China’s ability to produce its own advanced chips would also announce a considerable advancement in technological capabilities and would mean a serious blow to current US measures aimed at slowing its progress. It could inspire the country’s largest tech firms to get around US sanctions, fuelling the ‘whole nation‘ endeavour to produce Chinese innovation to beat the US.

New phone sparks worry China has found a way around U.S. tech limits

As Commerce Secretary Gina Raimondo was visiting China earlier this week, a sea-green Chinese smartphone was quietly launched online.

It was no normal gadget. And its launch has sparked hushed concern in Washington that U.S. sanctions have failed to prevent China from making a key technological advance. Such a development would seem to fulfill warnings from U.S. chipmakers that sanctions wouldn’t stop China, but would spur it to redouble efforts to build alternatives to U.S. technology.

Huawei Technologies Co.’s new smartphone, the Mate 60 Pro, represents a new high-water mark in China’s technological capabilities, with an advanced chip inside that was both designed and manufactured in China despite onerous U.S. export controls intended to prevent China from making this technical jump. Those sanctions were first imposed by the Trump administration and continued under President Biden.

The timing of the phone announcement on Monday, while Raimondo was in Beijing, appeared to be a show of defiance. Chinese state media declared it showed the U.S. that trade war was a “failure.”

Paul Triolo, the technology policy lead at the Washington-based business consulting firm Albright Stonebridge Group, called the new phone “a major blow to all of Huawei’s former technology suppliers, mostly U.S. companies.”

“The major geopolitical significance,” he said, “has been to show that it is possible to completely design [without] U.S. technology and still produce a product that may not be quite as good as cutting edge Western models, but is still quite capable.”

Biden administration officials declined to comment.

U.S. sanctions were intended to slow China’s progress in emerging fields like artificial intelligence and big data by cutting off its ability to buy or build advanced semiconductors, which are the brains of these systems. The unveiling of a domestically produced seven-nanometer chip suggests that has not happened.

Industry experts cautioned that it’s still too early to tell how competitive China’s chipmaking operations will become. But what is clear is that China is still in the game.

“This shows that Chinese companies like Huawei still have plenty of capability to innovate,” said Chris Miller, a professor at Tufts University and author of the book “Chip War.” “I think it will also probably intensify debate in Washington on whether restrictions are to be tightened.”

Huawei has been accused by a leading association of semiconductor manufacturers of building a collection of secret chip-making facilities across China to help the technology company bypass US sanctions, according to a report.

The Chinese tech firm moved into chip production last year and was receiving an estimated $30bn (£23.7bn) in state funding from the government, the Washington-based Semiconductor Industry Association was quoted as saying by Bloomberg, adding that Huawei had acquired at least two existing plants and was building three others.

The US commerce department had added Huawei to its export control list in 2019 over security concerns. The company denies being a security risk.

If Huawei is constructing facilities under names of other companies, as the Semiconductor Industry Association alleges, then it may be able to circumvent US government restrictions to indirectly purchase American chip-making equipment, according to Bloomberg.

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