Huawei preparations to reduce reliance on chips made using US-designed components were reported to be well underway, with the vendor eyeing a shift in production to businesses in mainland China to offset planned trade restrictions.
The vendor’s HiSilicon chip unit initiated moves in late 2019 to shift some production to Shanghai-based Semiconductor Manufacturing International Corp (SMIC), with the aim of reducing supplies from Taiwan Semiconductor Manufacturing Company (TSMC), Reuters reported.
Huawei accounts about 15 per cent of TSMC’s revenue, analysts estimate, and the news agency noted recent US moves to restrict the use of domestically-made components in chips produced for Huawei would “directly affect” the manufacturer.
In late March, the US administration advanced a proposal to limit Huawei’s access [1] to certain components, adding to previous moves to prohibit domestic chip makers supplying the vendor as part of a trade ban imposed in May 2019 [2], which has been stayed several times since [3].
During its 2019 earnings briefing, Huawei rotating chairman Eric Xu said if it faced a chip ban, it would look for sources in China, South Korea, Taiwan and Europe, noting he believes China’s government could take countermeasures [4] and Chinese companies would react by investing in local semiconductor facilities.
CEO and founder Ren Zhengfei last month insisted the Covid-19 (coronavirus) outbreak hasn’t dented its efforts [5] to develop its own technologies and reduce dependence on US imports, noting it boosted its 2020 R&D budget by $5 billion to more than $20 billion.
[1] https://www.mobileworldlive.com/featured-content/top-three/us-advances-move-to-limit-huawei-chip-access/
[2] https://www.mobileworldlive.com/featured-content/home-banner/huawei-lands-on-us-trade-blacklist/
[3] https://www.mobileworldlive.com/featured-content/top-three/us-seeks-solution-to-huawei-trade-extensions/
[4] https://www.mobileworldlive.com/featured-content/home-banner/huawei-sees-2020-as-pivotal-year/
[5] https://www.mobileworldlive.com/featured-content/top-three/huawei-lifts-rd-braces-for-financial-hit/
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