The news of Huawei Technologies Co.’s improvements in chip technology has fueled Chinese nationalism and sparked concern about the efficacy of Washington’s restrictions on the enormous country’s technological industry. The US is seeking to determine the precise specifics of these developments.
The government, according to US National Security Advisor Jake Sullivan, wants to know the precise makeup of the processor in Huawei’s Mate 60 Pro, which a teardown for Bloomberg News revealed was only a few years behind the current generation and was made by a company on the US government’s blacklist, Semiconductor Manufacturing International Corp.
After Huawei abruptly released its phone last week while Commerce Secretary Gina Raimondo was in China, Sullivan broke the hush in Washington. The disclosure was hailed as a breakthrough in attempts to lessen reliance on American technology by state-backed Chinese media on Wednesday. According to The Economic Daily, it personified “China Essence,” a play on the words “chip” and “heart.”
Sullivan said during a White House briefing on Tuesday, “I’m going to delay comment on the specific chip in question until we obtain more information on precisely its character and composition. What it does tell us, however, is that the United States should keep up its policy of “small yard, high fence” technological constraints that are narrowly focused on issues of national security rather than the more general issue of commercial decoupling.
Due to concerns that Huawei and SMIC might assist China’s military, both companies are subject to US restrictions that prevent them from accessing the most cutting-edge chip manufacturing and equipment. Beijing’s efforts to wean itself off American technology appear to be making headway, according to the Mate 60 Pro, which is powered by a 7nm Kirin 9000s processor. On Wednesday, some analysts speculated that the product, if Huawei could successfully manufacture it on a large scale, may pose a challenge to Apple Inc.’s iPhone sales in the nation.
Without holding a formal launch event, Huawei of Shenzhen delivered its flagship gadget. However, knowledge swiftly spread on social media as patriotic sentiment swept Weibo and other networks after initial reports about its chip and fast wireless capabilities appeared.
The device spurred a surge in Chinese chip suppliers and a search for firms associated with Huawei that would profit from its creation of a made-in-China CPU. A mass-production strategy, according to analysts like Edison Lee of Jefferies, might harm Apple in one of its key markets. According to Lee, the Mate 60 Pro might have a 38% impact on sales of Apple Inc.’s upcoming iPhone.
“It is now abundantly evident that every country in the world depends heavily on the semiconductor industry. Each nation is working hard to stabilise and improve its own operations given the geopolitical difficulties, according to Ajit Manocha, chief executive of the business association SEMI, who spoke to Bloomberg Television. “So I’m not surprised that China has been engaged in this for years,” you could say.
Continue reading: Jefferies: Huawei Model May Take 38% of China Sales for iPhone 15
Some analysts expressed concern that if the government does not take action when a violation of these restraints is discovered, the US-led international push to prevent China from gaining access to cutting-edge technologies may fail.
US authorities have emphasised time and time again that they prefer to de-risk than to divorce from China. At a time when Beijing is facing economic turmoil, President Joe Biden’s administration has made an effort to contact Beijing and ease tensions between the two largest militaries and economies in the world. Senior officials from Washington have travelled to Beijing in recent months, including Secretary of State Antony Blinken and Raimondo, but it doesn’t seem like these travels had a big impact.
Huawei is currently testing the US’s red line. According to Lin Tsung-nan, a professor of electrical engineering at National Taiwan University, “If the US doesn’t take any action, Huawei will think there’s nothing to be afraid of, and its other suppliers will start to emulate what SMIC does and US sanctions will crumble.”