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Bye bye, said Trump admin to Huawei: You give a cheque-ie to our techies, but there's no licence to ply
And them good ol' boys revokin' sanction to buy, singin', 'Soon will come the day that we fly'
As parting gifts go, this one ranks pretty low. With less than three days until the inauguration of Joe Biden, the Trump Administration has reportedly revoked several licences that would allow Huawei to buy US-made tech, and plans to deny over 150 pending requests.
According to Reuters, a portion of the licences relate to unspecified semiconductor products from Intel and Kioxia, the Japanese memory manufacturer that was formerly owned by Toshiba.
This move is the latest assault on Huawei's supply chain from the US, which imposed a chokehold on the firm’s ability to acquire components and technologies for its mobile and telecoms infrastructure businesses.
In May 2019, the Trump Administration placed Huawei on an entity list, citing national security grounds. Effectively, such a placement prohibits US companies from selling US-made or US-derived tech to those "entities" on the list without first obtaining a licence.
Licence approvals to do business with the Chinese firm since then have proven few and far between, and the few US companies lucky to be rubber-stamped tend to be making deals pertaining to older technologies, or those unlikely to be of use to Huawei's telecoms business.
Huawei cannot, for example, license Google Mobile Services (GMS), which is the all-important secret sauce in Android, and contains proprietary apps like the Google Play Store and Google Maps. More substantially, it cannot contract out any new semiconductor manufacturing work to its long-time supplier, TSMC.
This has devastated Huawei's mobile and telecoms businesses beyond the China. This year, Huawei is expected to sell a fraction of the phones it did in 2020. At the same time, Huawei has been frozen out of new 5G deployments in several key markets, most notably the UK, where Huawei’s supply chain woes were cited as a justification behind a wholesale ban.
In the short term, this latest hit is just the latest in several actions designed to diminish the influence of China’s tech sector. Earlier this month, China’s three largest carriers (China Mobile, China Unicom, and China Telecom) were placed on a financial ban list that resulted in them being de-listed from the New York Stock Exchange, and US investors forced to divest their positions. The same treatment is currently being meted out to mobile giant Xiaomi, which according to analyst Canalys is currently the third-largest mobile global manufacturer by shipments.
Separately, the US government has placed China’s largest semiconductor foundry, SMIC, on an entity list. The intent behind this is ostensibly to prevent it from catching up with its nearest rivals, TSMC and Samsung.
Drone manufacturer DJI has also been hit with sanctions over allegations of complicity in the mistreatment of China’s Uighur minority ethnic group.
Trump will leave office on Wednesday. While few in China's tech scene will be sad to see him depart, it remains unclear whether the incoming Biden Administration will diverge from Trump's antagonistic stance.
As previous Huawei leadership have noted, the dislike of China cuts across partisan lines in Washington. Any loosening of restrictions against Huawei or any other previously targeted firm would prove contentious, to say the least.
The Register has asked Huawei and Kioxia for comment. Intel declined to comment. ®