According to Reuters, it’s said that US officials have approved hundreds of millions of dollars in licensing applications to allow Huawei to buy chips for its growing auto parts business.
As the Trump administration imposed trade restrictions on the sale of chips and other components used in its network equipment and smartphone business, Huawei’s development has been hindered. The Biden government has been strengthening its hardline export to Huawei, refusing to sell Huawei the license for chips used in 5G terminals or used in conjunction with 5G terminals.
But in recent weeks and months, people familiar with the application process told Reuters that the United States has granted licenses to suppliers to sell to Huawei chips used in auto parts such as video screens and sensors. These approvals come as Huawei shifts its business to products that are less susceptible to the US trade ban.
Automotive chips are generally considered to be uncomplicated, which lowers the threshold for approval. A person familiar with the licensing situation said that the US government is issuing licenses for automotive chips, which may have other components that support 5G capabilities.
When asked about car chip licenses, a U.S. Department of Commerce spokesperson stated that the U.S. government continues to implement licensing policies “to restrict Huawei’s access to goods, software, and technology that may harm the interests of U.S. national security and foreign policy”.
This person also said that the U.S. Department of Commerce is prohibited from disclosing license approvals or denials.
Huawei spokesperson declined to comment on the news of these licenses, but said: “We position ourselves as a supplier of new parts for intelligent and connected cars, and our goal is to help auto OEMs make better cars.”
The United States has spared no effort to curb the growth of Huawei’s key communications-related businesses on the grounds that US national security and foreign policy interests have been threatened.
After putting Huawei on the blacklist of the US Department of Commerce in 2019, the US strengthened restrictions last year to restrict the use of US equipment to sell overseas chips. In addition, the United States is also pressing its allies on a global scale to exclude Huawei from the construction of 5G networks.
Huawei reported its largest revenue decline in history in the first half of 2021. Prior to this, US restrictions forced Huawei to sell part of its mobile phone business, and its new business growth area has not yet fully matured.
At this year’s Shanghai Auto Show, Huawei’s rotating chairman Xu Zhijun announced a cooperation agreement with three Chinese state-owned automakers, including BAIC, to provide them with a smart car operating system “Huawei Inside”.
A source said that after the supplier obtained the license to sell chips worth tens of millions of dollars to Huawei, Huawei asked these suppliers to apply again, and the value was even higher-about 1 to 2 billion US dollars. The valid period of the license is generally 4 years.
Richard Barnett, chief marketing officer of Supply Frame, a global electronics consulting firm, said that Huawei is in the “early stage” of trying to invest in the US$5 trillion automotive market, which has huge growth potential both in China and abroad.
“Cars and trucks are now computers with wheels.” Richard Barnett said, “This integration is what drives Huawei’s strategic focus to become a bigger player in this field.”