US Approves Licence For Huawei To Purchase Car Chips – Report

Chinese telecommunications giant Huawei has gained some welcomed news from US officials, after years of being blacklisted over national security concerns.

Reuters has reported, citing two people familiar with the matter, that US officials have approved license applications worth hundreds of millions of dollars for Huawei to purchase chips for its growing auto component business.

The approval is somewhat surprising considering the US added Huawei to an export blacklist for smartphone and networking chips. Former President Donald Trump declared the Chinese firm a national security threat.

Huawei blacklisting

The US essentially made it difficult or impossible for the Chinese company to access components such as microprocessors that utilise US design or manufacturing technology.

And that US hardline policy showed no signs of being overturned by Trump’s successor, Joe Biden, with the US continuing to apply more restrictions on Huawei, most recently on 5G chips.

In June this year the US Federal Communications Commission granted initial approval for rules banning new Huawei and ZTE equipment, and required US carriers to ‘rip and replace’ any Huawei kit.

It is fair to say the US blacklisting has badly dented the fortunes of Huawei, and cost it a leading position in the smartphone market.

Earlier this month, Huawei reported its largest-ever drop in revenues in the first half of 2021, in part due to the sale of its Honor smartphone brand.

Despite that, last week Huawei Chairman Guo Ping vowed to return to the firm to the smartphone ‘throne’, despite no official change in US sanctions against the firm.

Car chips

In the past few weeks however, people familiar with the application process told Reuters the US has granted licenses authorising suppliers to sell chips to Huawei for vehicle systems, such as video screens and sensors.

This will be welcome news for the Chinese firm as it seeks to refocus on areas that are not impacted by the US export restrictions.

And it should be remembered that the computer chips found in cars, vans and lorries are not considered leading edge or sophisticated.

Indeed, often these car chips are fairly old and therefore proven and robust.

This in turn lowers the threshold for US approval, which seeks to ban the Chinese firm from accessing more sophisticated chips.

One person close to the license approvals told Reuters the US government is granting licenses for chips in vehicles that may have other components with 5G capability.

Asked about the automotive licenses, a US 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 US national security and foreign policy interests.”

A Huawei spokesperson meanwhile declined to comment on the licenses.

“We are positioning ourselves as a new component provider for intelligent connected vehicles and our aim is to help OEMs (manufacturers) build better vehicles,” the Huawei spokesperson did tell Reuters.