Huawei Eyes Opportunity Posed By EU Semiconductor Goals
Telecoms giant Huawei is keen to work alongside European companies to help the bloc achieve ambitious new benchmarks for semiconductors by 2030, as the firm continues to face challenges resulting from US trade restrictions.
Since being put on a US export blacklist by the Trump
administration in 2019, China’s Huawei has faced obstacles in sourcing
components required in the development of its own chips.
Speaking at Huawei’s global analyst summit on Monday (12
April), rotating Chairman Eric Xu warned of the damage that the continuation of
these restrictions could do to global semiconductor supply chains, and said
that ongoing sanctions on Huawei’s business with American firms could raise
costs within the industry across the globe.
“In the coming years, higher costs for the semiconductor
industry is something we’re pretty sure of. The unwarranted US sanctions
undermined our company,” Xu said.
Huawei had “no expectation” of being removed from the US
entity list under the Biden government in the future, he added.
Many of Xu’s comments chimed with a study published in early
April by the Semiconductor Industry Association (SIA), which found that new
supply chain vulnerabilities have emerged in the sector, requiring government
intervention in the form of “funding incentives” that may be required to “boost
domestic chip production and research.”
The US sanctions, the report notes, have resulted in a
landscape that is “fueling a desire to develop self-sufficiency in
semiconductors.”
“The concepts of semiconductor ‘self-sufficiency’, or
technology ‘independence’ or ‘sovereignty’, are being discussed as potential
desirable national policy goals – often with a focus on semiconductor
manufacturing,” the study states, adding that the levels of investment required
to become fully self-sufficient and to “nearshore production capacity,” would
be “staggering.”
Referring specifically to the US sanctions, the report says
that these “rules have encouraged China to develop and seek alternatives, and
although it may take some time to do so, the trend towards reduction of
dependence on US semiconductor suppliers and indigenization of the supply chain
is beginning to take shape.”
For Huawei’s part, it too is looking elsewhere for
alternatives but believes that opportunities remain in the West, potentially in
the form of goals recently put forward by the European Commission to increase
its semiconductor manufacturing capacity.
The EU’s Digital Decade targets 2030
Since 2019, Huawei has sought other means of continuing its
involvement in the semiconductor trade. In Europe last year, news broke that
the company had signed a deal with French-Italian chipmaker STMicroelectronics,
seeking to mitigate the aftereffects of the downturn in trade as a result of the
entity list placement.
Huawei is now looking to increase its business opportunities
with European firms in the semiconductor space, under the assumption that
restrictions on US firms dealing with the company remain.
The firm “stands ready to work with all our European
partners on helping Europe attain genuine technology sovereignty and
competitiveness,” a Huawei official informed EURACTIV. “Part of this is helping
to strengthen Europe’s independent semiconductor capabilities.”
Earlier this year, the Commission unveiled its Digital
Decade targets, a list of objectives to be achieved by 2030. In the
connectivity domain, the bloc’s build-up of high-end microprocessors was
highlighted as an area in which the EU needs to make progress.
While Europe already designs and manufactures high-end chips
across several EU nations, the Commission recognized that “there are important
gaps, notably in state-of-the-art fabrication technologies and in-chip design,
exposing Europe to a number of vulnerabilities.”
As a result, one such target included in the Digital Decade
2030 plans is to ensure that the production of cutting-edge and sustainable
semiconductors in Europe including processors is at “at least 20% of world
production in value”.
Huawei smells an opportunity as part of the bloc’s new
benchmarks, hoping to claw back some of the business lost following the
restrictions imposed stateside.
“The EU has leading semiconductor manufacturers, from a
range of member states, and Huawei is keen to partner with them and help them
further develop their world-beating innovations where we can, to enhance
Europe’s tech ecosystem,” the Huawei official said.
However, the Chinese firm faces competition from US rivals
in terms of the Commission’s targets for 2030, particularly in the field of
semiconductors.
US computer giant Intel recently penned an op-ed for
EURACTIV in which the company praised the benchmarks, highlighting plans to
expand its semiconductor manufacturing operations in Ireland. The company is
“in a unique position to support the EU agenda of securing the supply of
advanced semiconductors for the European market,” the op-ed stated.
More broadly, the setbacks Huawei has faced in the US have
had an impact on the firm’s revenues worldwide, annual figures recently published
for 2020 show.
In Europe, Huawei saw its revenues down 12.2% for last year,
but filed increased profits for China, up by 15.4%. Globally, the company
registered a 3.2% profit increase.
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