• - US gives the green light to Huawei and SMIC suppliers despite a ban on the sale of semiconductor components

    US gives the green light to Huawei and SMIC suppliers despite a ban on the sale of semiconductor components
    1 Day, 17 Hours ago

    Tags:  SMIC  -  USA  -  China  -  Huawei

    According to documents released by the US Congress on October 21, 2021 (October 29, 1400), suppliers of Huawei and SMIC (China's largest chip maker) received billions of dollars worth of licenses between November 2020 and April 2021, despite Official US sanctions can buy American products and technology. According to the documents, which first reached Reuters, 113 export licenses worth $ 61 billion were issued to Huawei suppliers to supply their products to Huawei. In addition, 188 licenses worth about $ 42 billion have been approved for products to the Chinese company SMIC.

     US gives the green light to Huawei and SMIC suppliers despite a ban on the sale of semiconductor components

    The issuance of this authorization, which has angered pro-US policymakers in selling semiconductor components to China, reaffirms the need to make decisions based on economic logic. Without this logic, problems such as chip shortages will arise in the long run, and their effects will affect companies and the US economy. Republican Sen. Marco Rubio told Reuters Biden should explain why the exemptions apply. "This is just another example of President Biden's indifference to the serious economic and security threats posed by the Communist Party of China," said Gary Ng, chief Asia-Pacific economist at Natixis Investment Bank. "US interim licenses show a balance between long-term geopolitical perspectives and short-term chip shortages," he said. He added that putting pressure on chips shortages, especially in more advanced nodes and smaller silicon wafer discs, has also affected the domestic and international sales of American companies. US gives the green light to Huawei and SMIC suppliers despite a ban on the sale of semiconductor components

    As you know the Trump administration , Placed Huawei and SMIC on the Entity List in May 2019 and December 2020, respectively, due to national security concerns, and barred the two companies from doing business with US companies. Under the embargo, US companies wishing to export products and software to those on the list must obtain temporary licenses from the US Department of Commerce. Where applications are processed strictly and rejected by default, licensing is unlikely. SMIC is the fourth largest semiconductor manufacturer in the world, setting up new chip plants in Beijing and Shenzhen. SMIC CEO Zhao Haijun recently warned of a possible delay in the issuance of export licensing approvals by the United States and its impact on suppliers of equipment needed by the company. Despite these concerns, more than 9 out of 10 SMIC licensing applications have been approved, according to Reuters, compared to 69% for Huawei.

    Of course, most licenses do not allow the supply of sensitive products; Of the 113 licenses granted to Huawei for export during this period, 80 were related to non-sensitive goods, the sale of which required approval only because the company was blacklisted. This is about 121 out of 188 licenses for SMICs. Was. Although the Ministry of Commerce did not reject the Reuters report, it did not accept that it had eased the Chinese company's trade restrictions.

     US gives the green light to Huawei and SMIC suppliers despite a ban on the sale of semiconductor components Huawei Mate X2

    According to analysts, one of the reasons for approving the export license to Huawei and SMIC American suppliers are not yet ready to abandon the Chinese market as a high-demand market for American technology. "China is still the largest semiconductor market, accounting for more than 30 percent of global demand," said Arisa Liu, a senior fellow at the Taiwan Institute for Economic Research. "[Hence] the US semiconductor industry will not be willing to leave the market due to tensions between the two countries and will try to find ways to trade with China, the largest hub for electric vehicle production."

    Export licenses, on the other hand, will help Huawei overcome existing problems and barriers. This is because the company has been denied access to Google Mobile Services and then advanced fifth-generation chips since the start of US sanctions. "These licenses will be vital to keeping the Huawei brand in the market and even potentially giving it time to revitalize," said Will Wong, an analyst at IDC Market Research Institute in Singapore. It does.

    However, Neg said the United States could still suspend export licenses after concerns about chip shortages eased. On the other hand, Wang believes that despite the importance of the Chinese market, geopolitical issues are still expected to remain a priority for US government decisions and that government policy will focus more on more advanced technologies such as 5G. In his view, "the Biden administration is taking a more targeted approach and trying to balance national security with the economy."

    When the new US administration took office earlier this year, some believed that Huawei Will be freed from previous restrictions; However, this prediction has not been realized in practice. According to a former Trump Commerce Department official, "This short licensing period will not open a clear window into the licensing process for Huawei and SMIC. Has taken. "

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