The U.S. government took new action against a company Huawei Chinese, but this time it particularly targets its chip development and production division (Hi siliconeHiSilicon, which within a few years became a key player in China’s ambitions in the semiconductor industry, but it will now lose access to tools that are essential to its success.
It is believed that this measure could be the most harmful so far against Huawei, which US officials told reporters on Wednesday: “It is a tool of strategic influence” of the Communist Party of China. For its part, Huawei condemned the American allegations, describing the new measures as “arbitrary and malicious.”
(Hi-Silicon) – which was founded in 2004 – develops mostly chips for Huawei, which is behind in the global chip sector, which is dominated by American, Korean and Japanese companies. Like most electronics companies, Huawei has relied on others for chips that power its products.
But the massive investment in research and development has helped drive the rapid progress of (High Silicon), and in recent years the unit of 7,000 employees has been central to the rise of Huawei as a dominant player in the global smart phone market and the 5G telecom network market.
The HiSilicon Kirin smartphone processor is close to performance from companies made by companies such as Apple and Qualcomm, and the processor is believed to be a rare example of an advanced Chinese semiconductor manufacturer competing globally. (Hi Silicon) also plays a central role to lead Huawei in the fifth generation market.
Last March, Huawei revealed that 8% of 50,000 base stations for 5G networks that had been sold in 2019 came without American technology, using Hi-Silicon chips instead of American components.
But the new US export control base, which Reuters reported last week, aims to prevent (Hi Silicon) from accessing two important tools: chip design programs from American companies, such as Cadence Design Systems, Synopsys, and the ingenuity of “foundry” manufacturing led by TSMC Taiwan, which produces chips for many of the world’s largest semiconductor companies.
With the new restrictions, analysts say, Hi-Silicon will be “in a position where it cannot manufacture the chips at all, and if it does so, it will not come to the fore anymore.” And without the processors that it produces on its own, Huawei will lose its edge in favor of competitors in the Chinese smartphone market, after it lost a lot of its share in the global market after being deprived of Google services and applications.
Industry sources say: Huawei has a stock of chips, and the new US base will not enter into force for 120 days. US officials also note that licenses for some technologies can be granted. Hi-Silicon can also continue to use the design software it has got.
However, analysts agree that (Hi Silicon) is in a difficult situation, almost all chip factories worldwide – including: Chinese companies – buy the equipment from specific equipment manufacturers, led by US companies, such as Applied Materials and Lam Research Corp, and KLA.
The new US base requires companies that use American machines to obtain a license before making chips designed by Huawei or to be delivered to them.