Global Economics

U.S. grants permit for Huawei to purchase auto chips

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Two sources familiar with the case stated that U.S. officials had authorized licensing applications worth hundreds of millions of dollars for China’s blacklisted telecom company Huawei to buy chips for its booming car component business. Huawei, the world’s largest telecoms equipment manufacturer, has been hampered by trade restrictions imposed by the Trump administration on the selling of processors and other components needed in its network gear and mobile operations. The Biden administration has tightened its grip on Huawei exports, refusing to grant Huawei licences to sell semiconductors for use in 5g devices.

It’s been reported that in recent weeks and months, the US obtained licenses allowing manufacturers to sell Huawei semiconductors for components such as video displays and sensors. According to Huawei, the approvals coincide with the company’s shift in commercial focus to things that are less vulnerable to U. Sit’s a given that auto chips aren’t very complex, therefore The government is awarding licences for chips in automobiles that may contain additional components with 5g capabilities, according to a source close to the process.

Asked about the automotive licenses, a U.S. Department of Commerce spokesperson said the government continues to consistently apply licensing policies “to restrict Huawei’s access to commodities, software, or technology for activities that could harm U.S. national security and foreign policy interests.”

The Commerce Department is prohibited from disclosing license approvals or denials, the person added. A Huawei spokeswoman declined to comment on the licenses, but said: “We are positioning ourselves as a new component provider for intelligent connected vehicles, and our aim is to help car OEMs (manufacturers) build better vehicles.”

Huawei’s major communications-related industry has been severely curtailed by the United States, citing dangers to national security and foreign policy interests.US Commerce Department blacklisting in 2019 barred the sale of US goods and technology to Huawei without special licences, and last year, the US further up restrictions on the sale of chips created abroad with US equipment to limit the sale of those chips in foreign markets.” It also lobbied partners to remove Huawei from their 5G networks because of surveillance fears. Allegations have been denied.

It was revealed earlier this year that “Huawei Inside”, the company’s smart vehicle operating system, will be supplied to the BAIC Group, three Chinese state-owned automakers that were represented at the Shanghai Auto Show by Eric Xu, Huawei’s rotating chairman. According to a source, Huawei has asked suppliers to reapply with bigger values, such as one or two billion dollars, after receiving licenses permitting the sale of tens of millions of dollars in semiconductors to Huawei. There is a four-year limit on the validity.

Global electronics consultant Supply Frame’s chief marketing officer Richard Barnett says Huawei is only getting started in the $5 trillion global automotive sector, which has a lot of room for expansion both inside and outside of China. “Cars and trucks are now computers on wheels,” said Barnett, “That convergence is what’s driving Huawei’s strategic focus to be a bigger player in that area.”