Over the past few years, the US has imposed severe chip export restrictions on Huawei and Chinese corporations. This cut off corporations’ access to critical semiconductors.
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China’s chip industry will “rejuvenate” consequently of US sanctions, Huawei’s chief executive said on Friday, because the Chinese telecommunications giant announced a breakthrough in semiconductor design technology.
Eric Xu, Huawei’s rotating CEO, has spoken words of struggle against Washington’s restrictions on technology exports to China.
“I think that China’s semiconductor industry will not sit idly by, but will make efforts around … self-empowerment and self-reliance,” based on the official translation of Xu’s comments during a press conference.
“Within the case of Huawei, we will support all of the efforts of the Chinese semiconductor industry for self-saving, self-reinforcement and self-reliance.”
Semiconductors have been a flashpoint within the broader battle between the US and China for technological supremacy. Over the past few years, Washington has tried to shut out China and Chinese corporations through sanctions and export restrictions.
In 2019, Huawei was placed on a US blacklist called the Entity List, which prohibited US corporations from selling technology to a Chinese company. This includes chips for 5G products – where 5G refers to the following generation of super-fast mobile networks. The chip restrictions on Huawei were tightened in 2020 and effectively separated it from the newest state-of-the-art chips it required for its smartphones.
Washington then introduced broader chip restrictions last 12 months, designed to deprive Chinese corporations of critical semiconductors that would serve artificial intelligence and more advanced applications.
The US is anxious that China could use advanced semiconductors for military purposes.
Huawei’s Xu said the changes could spur, relatively than hinder, China’s domestic semiconductor industry.
“I think China’s semiconductor industry will get better under such sanctions and create a really strong and self-sufficient industry,” Xu said.
Experts previously told CNBC that the newest round of US restrictions would likely hurt China’s semiconductor industry. Under current regulations, some tools or chips made using American technology can’t be exported to China.
The character of the chip supply chain makes it very effective. American tools are used throughout the chip manufacturing process, even when the semiconductor is manufactured abroad.
China’s domestic chip industry relies heavily on foreign technology and lacks corporations that may match those within the US, Taiwan, Japan and South Korea.
China has made self-reliance a giant priority in its tech battle with the US, but experts agree it will be an incredibly difficult feat.
Huawei’s breakthrough
Chinese corporations at the moment are attempting to develop the tools required for semiconductors within the country.
Last week, Chinese media reported that Xu said in a speech that Huawei and other domestic corporations had jointly developed the electronics design tools needed to supply semiconductors 14 nanometers and bigger. Xu said that later this 12 months, these tools will be verified, allowing them to be put into use.
The rotating chairman confirmed that he gave the speech, but added that these tools will mean “little or no” to Huawei’s business. It just means Chinese corporations have the design tools required domestically, he said.
The number 14 nanometers refers to the dimensions of every individual transistor on the chip. The smaller the transistor, the more of them will be packed onto one semiconductor. Typically, reducing the nanometer size can lead to stronger and more efficient chips.
But Huawei ideally needs chips with a much smaller nanometer size for more advanced applications, that are currently hard to come back by. The corporate continues to be feeling the results of the US sanctions – on Friday it said net profit fell 69% year-on-year in 2022, marking its biggest drop ever.