US chip designer Nvidia’s plans to sell technology to Huawei jeopardized
US chip designer Nvidia is considering selling technology to Chinese manufacturer Huawei, which has been deemed a national security threat to the US. However, this may not be possible due to the Biden administration’s plans to tighten the restrictions currently placed on the Chinese company.
Restrictions placed on Huawei
Huawei was placed on the US Commerce Department’s entity list in 2019, limiting the supplies that it can import from America. Despite still receiving billions in supplies from US firms, Huawei no longer has access to Google and has had to develop its own HarmonyOS operating system. It has also developed the Huawei Mobile Services ecosystem to replace the Google Mobile Services platform that it is no longer allowed to use.
In 2020, the Commerce Department changed an export rule to stop foundries using American technology from shipping cutting-edge chips to Huawei.
Impact on Qualcomm
Meanwhile, Huawei has been able to use Qualcomm Snapdragon chipsets for its flagship models; however, these chipsets are adapted to only work with 4G connectivity and not with 5G signals. Huawei’s access to these limited system-on-chips (SoC) could also be jeopardized if the US government further blocks the company from obtaining US supplies.
A draft report from a government contractor states that “the proposed 2023 amendment of (the Commerce Department’s) licensing will likely have a high economic impact on Nvidia.” However, a senior State Department official has clarified that the report doesn’t reflect the views of the US government as it “has written and contracted multiple reports on this subject, based on different contingencies, which arrive at very different conclusions.”
Qualcomm, which currently supplies 4G versions of its high-end chipsets to Huawei, would also face a “moderate economic impact” from any policy change. The report adds that Huawei would suffer more as it “relies heavily on Qualcomm’s modem chips to support its smartphone offering.”
Controversy around Huawei’s entity list inclusion
A controversy surrounds the timing of Huawei’s entity list inclusion as it occurred when the company was about to become the largest smartphone manufacturer globally, ahead of Samsung and Apple. Huawei has also been accused of using backdoors in its devices and networking equipment to spy on US firms, a charge it has consistently denied.
Regarding the Reuters article, an Nvidia spokesman stated, “The China market presents a significant opportunity for the US semiconductor industry. While we are unable to comment on any pending license requests, we work with customers and partners worldwide to comply with all applicable export controls and meet market demand.”