US Allowing Companies To Supply Chips To Huawei, With A Big Caveat

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The sanctions put forward by the US government over the last one-and-half-year pushed China's Huawei to the brink of extinction. According to a new report from the Financial Times, the US is now allowing more chipset manufacturers to supply their chips to Huawei.

The caveat here is that the license will be granted only if the components don't support 5G. However, these new measures might provide a sigh of relief for Huawei, which is still entangled in the fight between the US and China. If you didn't know, Huawei is the world's largest telecom equipment maker.

Huawei's chip suppliers can get a license from the US, but not for 5G

Earlier this year, it also became the largest 5G smartphone manufacturer in the world. Unlike in the Western markets, there are quite a few sub $200 smartphones in China with 5G support. While Huawei will be able to survive in the smartphone market, the lack of 5G makes its product inferior to the competition.

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Furthermore, its 5G telecommunications business might continue to get affected. Huawei has reportedly piled up millions of high-end 5G chipsets for its new flagship smartphones. However, the newly launched Mate 40 series might bring down the reserves very fast.

It can now source AMOLED displays and imaging sensors

Apart from Huawei, the US Commerce Department has also imposed sanctions on China's Semiconductor Manufacturing International Corporation (SMIC). As per the previous reports, Samsung already received the license to supply displays to Huawei.

Both Sony and OmniVision have got permission to supply the imaging sensors for use in Huawei's smartphones. The US government has already granted about one-third of the 300+ applications received from Huawei's supply chain.

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According to the source, Qualcomm and MediaTek might receive licenses later this year. However, none of them will be able to provide 5G-enabled chipsets to Huawei. On the other hand, SMIC, China's largest contract chip manufacturer, lacks advanced technologies to manufacture competitive 5G chipsets.

Currently, any company that is using US technology needs to get a license from the US government to work with Huawei. Unless the situation improves drastically in the coming months, the new Kirin 9000 mobile chipset built on TSMC's 5nm process technology could become the last in-house chipset from Huawei.

There is no mention of TSMC getting the approval for even manufacturing 4G chipsets for Huawei. TSMC is manufacturing the in-house designed Kirin chipsets for many years.

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