Huawei’s plans to enter the US market unfortunately had to be postponed indefinitely. The Chinese company suffered major losses as a result of the trade war between the US and China. However, the situation has still not calmed down.
After a series of exceptions, the final position came: the ban on doing business with US companies, including Google. So Huawei smartphones no longer include Google services or the App Store. New information, however, suggests that this is still not everything, and they may also lose their own HiSilicon processors.
Are HiSilicon processors at risk?
U.S. President Donald Trump extended the trade ban that also applies to Chinese Huawei for another year (until 15. May 2021), so the smartphone maker has to keep looking for other and alternative solutions. This time, however, once the new rules are in place, Huawei could also lose access to its HiSilicon processors.
The change in the rules is that it will “prevent US technologies from enabling malicious activities that run counter to US security and foreign policy interests,” Trade Secretary Wilbur Ross said in a statement. He added that Huawei and its affiliated companies “have intensified their efforts to undermine these national-security-based restrictions.”
The U.S. Department of Commerce said the rule will allow Huawei to receive already manufactured units for up to 120 days, as long as the shipments are already completed. The regulation is valid starting Friday. The incriminated chipsets should be manufactured by Friday, otherwise under the new rules they will become ineligible.
Huawei is trying to save the situation
The impact of the new rules is hitting the Taiwanese company TSMC right now, which currently handles production of HiSilicon Kirin chips for Huawei. This order could also further deepen tensions with China.
It’s said that Donald Trump could expand the ban to prevent companies from supplying products made using U.S. technology to Huawei. As a result, Huawei increased its inventory orders from its processor supplier, TSMC, which was also reflected in financial results for the first quarter 2020.
However, Huawei is fighting back and wants to defend its place in the market. That’s why it’s turning to the Shanghai-based Chinese company SMIC, which could become the new manufacturer of HiSilicon Kirin chips for smartphones.
New findings point exactly to this: the new Kirin 710A processor, intended mainly for mid-range and upper mid-range smartphones (made with a 14 nm technology), is the first chip made by China’s SMIC for Huawei.
14 nm may not be enough
Besides this problem—one that the manufacturer could potentially “dodge” again—the bigger question is whether a 14 nm process will be enough to maintain quality and competitiveness. Taiwan’s TSMC, which makes chips not only for U.S. Apple but also for Qualcomm, plans to move from the current 7 nm to 5 nm manufacturing technology.
Huawei also has to find a way out for its flagship devices, because a chip made using 14 nm technology—also aimed at cheaper smartphones—will definitely not be sufficient. In the end, we may see full autonomy, including its own Harmony operating system, which the Chinese manufacturer still has as a backup.
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