On May 15, the first anniversary of Huawei's inclusion in the entity list, the U.S. Department of Commerce issued new regulations on chip control for Huawei. The new regulations strictly restrict Huawei's use of U.S. technology, software design and manufacturing of semiconductor chips for the sake of national security. As long as Huawei exports Huawei products using any U.S. technology, it needs to apply for a license from the United States.
New regulations issued by the US Department of Commerce
As soon as the news came out, the global business community and stock market caused great turbulence. The stock prices of Qualcomm, Cisco, apple, Boeing and other US companies have been affected to varying degrees. The two-hour decline of Qualcomm exceeded 7%, which can be said that it would attack Huawei at the expense of the interests of US companies.
L impact of new regulations
Today, with a high degree of division of labor in the global chip industry, no supplier can 100% decouple any technology of a manufacturing power and the first power in science and technology. That is to say, the United States has left the choice to thousands of Huawei's suppliers around the world to make a choice: if you want to continue to do business with Huawei, you have to apply to the United States; if you apply to the United States and completely rely on the U.S. license, and do not conform to the current international general trade regulations, you may be included in the unreliable list by China, and then lose the Chinese market.
In the next period of time, it may be the largest standing team in the history of science and technology. Different enterprises have to make their own choices under different geopolitical pressures and their own business considerations. In addition to large enterprises like TSMC, many small and medium-sized enterprises may have to face a non-A or B choice.
Chips are the lifeblood of Huawei. The most affected part of Huawei this time will be its high dependence on imported chip OEM. The industry expects that under the new regulations, the expansion, maintenance and continuous operation of the hundreds of billion dollar network built by Huawei products in more than 170 countries around the world may be impacted, and the information and communication of more than 3 billion people using Huawei products and services may also be affected. The United States is trying to cut off Huawei's chip supply and curb Huawei's development.
L response and counterattack
On the night of May 15, the Global Times reported that a source close to the Chinese government said that if the US finally implemented the above plan, China would fight back strongly and safeguard its legitimate rights and interests. On May 17, a spokesman for the Ministry of Commerce said in response to a reporter's question that China will take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises. Hua Chunying, a foreign ministry spokesman, also pointed out at a regular press conference on April 2 that the Chinese government would never sit back and ignore the US's bullying of science and technology.
On May 18, according to Taiwan's economic daily, Huawei has urgently added up to $700 million to TSMC's large orders, covering 5-nanometer and 7-nanometer processes. Huawei's official response is that it will try its best to find a solution.
In fact, one of Huawei's current solutions is to find a more suitable chip generation factory that is not affected by the United States, while SMIC is a good potential replacement. SMIC has introduced the "n + 1" process. The chips produced by this process are equivalent to those produced by TSMC 7Nm process in terms of performance and power consumption. Although the core technology of 7Nm or even 5nm still has a large gap, it is the only enterprise with high-end chip OEM capability in China.
The latest news is that SMIC has entered into new joint venture contracts and new capital increase and share expansion agreements with national integrated circuit fund and other parties. SMIC international has received two major funds to inject capital, with a scale of about 20 billion yuan. The news clearly hit back at the new US regulations, supporting the development of the domestic chip industry and Huawei.
The rise of China is unstoppable. We need to believe that Huawei's heavy-duty development and China's exploration and efforts on the road of science and technology will surely lead to a bright future. Finally, I would like to conclude with an article map released by Huawei in Xinsheng community after the release of the new US regulations