Speculation of the US government `` tightening sanctions on Huawei '' Targeting semiconductor subsidiary HiSilicon?

On May 15, the U.S. government announced tougher sanctions against Huawei Technologies, the largest telecommunications equipment company in China. After three days of silence, Huawei executives made their first public comments.

"It is inevitable that our business will be severely impacted. But after the past year of trying, we are stronger. We are confident that we will find a solution as soon as possible."

Huawei Rotating Chairman Guo Ping said on May 18 at the annual conference for analysts held in his home city of Shenzhen. Guo said the new sanctions are still unclear and it is not possible to make a concrete judgment at this time about the extent of the impact on Huawei's business.

A year ago on May 16, 2019, the U.S. Department of Commerce added Huawei to the Entity List. added. As a result, if more than 25% of U.S.-origin technology and software is used in products that are to be sold to Huawei or its subsidiary HiSilicon, it must obtain permission from the Ministry of Commerce. It is a de facto embargo on the subject products.

The new sanctions will also have a 120-day grace period

In this tightening of sanctions, the scope of the embargo has been further expanded. Based on designs by Huawei and HiSilicon, any product manufactured using US-origin technology or software requires approval from the Department of Commerce, including those made outside the US.

In today's semiconductor industry, American design software and manufacturing equipment are widely used in the process of designing and manufacturing chips. It is believed that the US government took advantage of this situation to prevent Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest consignment semiconductor manufacturer, from contracting production for high silicon.

In an official statement separate from Mr. Guo's comment, Huawei stated that the tightening of US sanctions "would undermine trust in global collaborations such as the semiconductor industry." This will make it difficult for companies in other countries to use U.S. technology, and ultimately it will not be in the interests of the U.S. itself."

However, there is a 120-day grace period for the new sanctions. There will be no immediate suspension of sales of covered products that have already been contracted.

(Caixin Reporter: Zhang Jishu) *The original will be delivered on May 18

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