Exclusive: Huawei Unit Dispatches Surveillance Chips Made in China Indicating Potential Comeback

By Better Today On Sep 20, 2023

## Huawei’s New Chip Shipments Indicate Progress Despite US Export Controls

A unit of Huawei Technologies is shipping new surveillance camera chips made in China, hinting that the tech giant is finding ways around the U.S. export controls that have been in place for four years, according to sources familiar with the matter.

The shipments from Huawei’s chip design unit, HiSilicon, started this year. Some of the customers receiving these chips are reportedly Chinese. This move signifies Huawei’s ongoing efforts to navigate Washington’s export controls, which have been in place since 2019 and have restricted the company from obtaining components and technology from U.S. firms without approval.

## Huawei’s New Domestically Made Smartphones

In recent weeks, Huawei unveiled new smartphones that utilize advanced chips. Analysts suggest these chips are domestically made, further supporting the notion that Huawei is overcoming the export controls.

Surveillance chips are less complex to manufacture compared to smartphone processors. As such, the reintroduction of HiSilicon into the market is expected to cause significant disruptions.

## Circumventing U.S. Restrictions on Chip Design Software

Huawei appears to have found a workaround for U.S. restrictions on chip design software. In March, the company announced it had made breakthroughs in design tools for chips produced at and above 14 nanometers. Although this technology is two to three generations behind the leading-edge technology, it is still a significant advancement for Huawei.

## Decline and Rise of HiSilicon in the Market

HiSilicon, which mainly supplies chips for Huawei equipment, has previously supplied external customers such as Dahua Technology and Hikvision. Before the U.S. export controls, HiSilicon dominated the chip supply to the surveillance camera sector, with an estimated global share of 60% in 2018.

However, by 2021, HiSilicon’s global market share had dramatically reduced to just 3.9%. Despite this, sources suggest that HiSilicon is now focusing on the high-end market and aims to reclaim market share from competitors like Taiwan’s Novatek Microelectronics Corp.

## Huawei’s Advanced Chip Production

Huawei drew attention in late August with the launch of the Mate 60 Pro, a new smartphone that uses an advanced chip and provides 5G speeds. This has been hailed as a revival of Huawei’s smartphone business that was crippled by U.S. sanctions.

However, the U.S. Commerce Secretary, Gina Raimondo, stated recently that the U.S. has no evidence that Huawei can produce smartphones with advanced chips in large volumes.

## Huawei’s Access to Sophisticated EDA Tools

There are also assertions that Huawei has access to sophisticated electronic design automation (EDA) tools. TechInsights analyst Dan Hutcheson stated that their analysis of the Mate 60 Pro and other components suggested that Huawei had access to sophisticated EDA tools that “they are not supposed to have.”

Original Story at www.reuters.com – 2023-09-20 07:06:00