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Good news for HUAWEI's smartphone business as US reportedly allows chip sales

Chipmakers can apparently do business with HUAWEI as long as it has nothing to do with the brand's 5G infrastructure unit.

Published onOctober 29, 2020

HUAWEI Kirin 9000
  • The US has reportedly allowed chipmakers to sell components to HUAWEI.
  • Smartphone chip components can be sold to HUAWEI as long as they are not used for its 5G business.

HUAWEI might be in for some relief as far as its smartphone business is concerned. According to a Financial Times (FT) report, the US has started allowing chip companies to supply components to HUAWEI. The only caveat is that the components should not be used for the Chinese brand’s 5G business.

The US Department of Commerce “has been telling companies in recent conversations that while licenses to supply HUAWEI are handled with a view to denial, this can be overcome if you can demonstrate that your technology does not support 5G,” an unnamed chipmaker involved in discussions with US authorities told FT. The chipmaker was reportedly referring to HUAWEI’s 5G infrastructure business.

The move could come as a huge boon for HUAWEI which has been reeling under the US trade ban since last year. The US government’s most recent restrictions banned HUAWEI from sourcing any hardware made with US technologies. Because of these sanctions, HUAWEI lost TSMC as a chip manufacturer, spelling the end for its Kirin processors.

Also read: You think the US has gone too far against HUAWEI

Between this latest ease-up and the move allowing Samsung Display to supply OLED panels to HUAWEI, it looks like the cloud of US restrictions is slowly lifting from the Chinese phone maker.

Even though the US will reportedly continue to restrict the company’s access to 5G equipment, the resumption of other chip components might mean that the Kirin story is not over after all.

FT reports that two Asian semiconductor companies have said they are optimistic about getting licenses to do business with HUAWEI. “It has been indicated to us that chips for mobile devices are not a problem,” said one of them.

There has been no official word on these relief measures from the US Department of Commerce, so it’s a wait and watch game for now.

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