U.S. approves licenses for Huawei to buy auto chips
U.S. officials have approved license applications worth
hundreds of millions of dollars for China’s blacklisted telecom company Huawei
to buy chips for its growing auto component business, two people familiar with
the matter said.
Huawei, the world’s largest telecommunications equipment
maker, has been hobbled by trade restrictions rump-admin-slams-chinas-huawei-halting-shipments-intel-others-sources-2021-01-17
imposed by the Trump administration on the sale of chips and other components
used in its network gear and smartphones businesses. The Biden administration
has been reinforcing the hard line uppliers-2021-03-11
on exports to Huawei, denying licenses to sell chips to Huawei for use in or
with 5g devices.
But in recent weeks and months, people familiar with the
application process told Reuters the U.S. has granted licenses authorizing
suppliers to sell chips to Huawei for such vehicle components as video screens
and sensors. The approvals come as Huawei pivots its business toward items that
are less susceptible to U.S. trade bans.
Auto chips are generally not considered sophisticated,
lowering the bar for approval. One person close to the license approvals said
the government is granting licenses for chips in vehicles that may have other
components with 5g capability.
Asked about the automotive licenses, a U.S. Department of
Commerce spokesperson said the government continues to consistently apply
licensing policies “to restrict Huawei’s access to commodities, software, or
technology for activities that could harm U.S. national security and foreign
policy interests.”
The Commerce Department is prohibited from disclosing
license approvals or denials, the person added.
A Huawei spokeswoman declined to comment on the licenses,
but said: “We are positioning ourselves as a new component provider for
intelligent connected vehicles, and our aim is to help car OEMs (manufacturers)
build better vehicles.”
Citing threats to U.S. national security and foreign policy
interests, the U.S. has gone to great lengths to slow the growth of Huawei’s
key communications-related business.
After placing Huawei on a U.S. Commerce Department trade
blacklist in 2019, which banned sales of U.S. goods and technology to the
company without special licenses, the U.S. last year ratcheted up restrictions
to limit the sale of chips made abroad with U.S. equipment. It also campaigned
to get allies to exclude Huawei from their 5G networks over spying concerns.
Huawei has denied the allegations.
Huawei reported its biggest ever revenue drop in the first
half of 2021, after the U.S. restrictions drove it to sell a chunk of its
once-dominant handset business and before new growth areas have fully matured.
Underscoring the shift into smart cars, the company’s
rotating chairman Eric Xu announced pacts with three state-owned Chinese
carmakers, including BAIC Group, to supply “Huawei Inside”, a smart vehicle
operating system, at the Shanghai Auto Show earlier this year.
In another sign of Huawei’s ambition in the space, after
suppliers have received licenses authorizing the sale of tens of millions of
dollars of chips to Huawei, the company has requested they apply again and
request higher values such as one or two billion, one source said. Licenses are
generally good for four years.
Richard Barnett, chief marketing officer at a global
electronics consultancy called Supply Frame, said Huawei is in the “early
innings” of trying to invest in the $5 trillion automotive market that has
large potential growth both inside and outside of China.
“Cars and trucks are now computers on wheels,” said Barnett,
“That convergence is what’s driving Huawei’s strategic focus to be a bigger
player in that area.”
Comments
Post a Comment