US Allows Sales of Chips to Huawei’s Non-5G Businesses

The US is allowing a growing number of chip companies to supply Huawei with components as long as these are not used for its 5G business.

In a major relief to the Chinese tech giant Huawei, the United States is now allowing more and more chipset makers to supply components to the China-based company as long as they are not used for the 5G business.

A new report coming from Financial Times indicates that this could offer a potential lifeline to Huawei as the sanctions imposed against the companies were more and less threatening the survival of the giant.

The smartphone business of Huawei, which is the most hit area for the company, now has a chance to make recovery. The report indicates that the application for a license to supply components to Huawei gets approved if the company demonstrates that the technology does not support 5G.

One of the executives of an Asian semiconductor company has said to FT that chips for mobile devices are not a problem and added that the company is optimistic to get a license to continue doing business with Huawei. 

In an apparent US-China trade war, the United States put Huawei on Entity List in May last year, effectively banning the company from doing business with US-based companies or companies dealing with American technology, without a special license from the U.S.

A couple of months, the restrictions were tightened as the United States banned the supply of chipset and technology to Huawei. While it stopped the supply of chips to Huawei, the ban has also been proven damaging for the overall semiconductor industry as suppliers anticipate loss of billions of dollars.

However, in recent times, more and more companies are getting a license to deal with the Chinese giant. Samsung Display recently got a green signal to provide OLED panels to Huawei and prior to that, Intel had confirmed that it received approval to supply chips.

It is being said that Japan-based Sony and China-owned OmniVision, which has its headquarters in California, have also received approval to supply CMOS image sensors that are used in smartphone cameras.

As per the report, more than 300 companies, including the likes of Samsung Electronics, Qualcomm, MediaTek, among others have applied for a license to do business with Huawei and they are expected to get approval in the coming weeks or months.

October 29, 2020