The clashes between Huawei and the United States administration have no end, and the Biden government is also tightening its grip on Chinese tech companies. But the Chinese have also taken action to circumvent U.S. sanctions in innovative ways. Huawei plans to license its smartphone designs to third parties to escape from sanctions.
The conflicts between Chinese tech companies and the U.S. administration started when Donald Trump called them a threat to the country’s national security. At the same time, the U.S. Senate imposed sanctions on these companies.
Now, Huawei wants to collaborate with other manufacturers to bypass sanctions. The company previously had to sell its sub-brand Honor to a consortium. Also, they decided to buy 4G Snapdragon chips instead of 5G as a way to escape from US-imposed restrictions.
As per the Bloomberg report, the new plan will allow Huawei to access equipment like smartphone processors. U.S. sanctions, in particular, have barred Huawei from accessing these critical components. Measures have also been taken to restrict Huawei software. By licensing smartphone designs to third-party manufacturers, Huawei can significantly expand its smartphone production.
China Postal and Telecommunications Appliances Co. (PTAC) will be Huawei’s partner for selling self-branded smartphones. The PTAC is currently helping Huawei to sell Nova phones like Nova 9.
Huawei partners with PTAC to bypass its trade ban
Huawei’s market share is currently declining significantly, and partnering with PTAC may be the only way out for the company to keep its operations alive. As the company chairman noted before, chip sourcing is their biggest problem and greatly affects their operations.
Huawei has recently been the target of a new round of U.S. sanctions. About two weeks ago, the Senate passed a new bill imposing sanctions on Huawei and ZTE. The bill was also signed by Joe Biden to be officially implemented. Under the new bill, the Federal Communications Commission (FCC) should not approve any requests from the two companies. Previous licenses are also revoked.
It’s still unclear how the U.S. administration would react to Huawei and PTAC partnership. However, restrictions may be imposed on the PTAC if the United States identifies this cooperation as a backdoor for circumventing sanctions.
None of the parties has yet officially responded to the news. But this is not something that can be kept secret for long. Huawei is one of the largest smartphone manufacturers in China, and its return to the global market will undoubtedly provoke a lot of reactions.