The US-China trade war saw Huawei getting banned in the United States in 2019 and the Chinese giant has been on the Entity List of the US government ever since, making it very difficult for the firm to continue doing its hardware business.
Huawei, along with its 70 subsidiaries, has been banned from doing business with companies based in the United States or using technologies developed in the US. The list also includes some other China-based companies.
Amid this trade war, China is gearing up to become self-sufficient in several technological sectors, including making semiconductors. It is also working on several next-generation technologies such as AI, ML, 6G, and more.
The United States is also working on being a frontrunner in the technology sector and is set to spend around $54.2 billion to increase the competence of American firms. The bill, named US Innovation and Competition Act, is currently in the House of Representatives.
When Huawei was put on the Entity List, the company was accused by US officials of being a national security risk for its alleged ties with China’s military and security agencies. However, the company has repeatedly denied such claims, for which the US government has provided no proof so far.
Because of the ban in the United States, Huawei can no longer make its own semiconductor, and companies doing business with the Chinese giant need to take a special license or permission from the US government, which is unlikely to come by.
With difficulties in the consumer electronics business, Huawei has now shifted its focus to other businesses, including software development and electric vehicles. Both these fields aren’t the core part of Huawei and it will be interesting to see if the Chinese company manages to establish itself in such sectors.
Huawei’s first-quarter revenue fell by 16.5 percent to 152.2 billion yuan, from 182.2 billion yuan ($28.1 billion) in the same period last year mainly due to a shrinking consumer business, the company’s main revenue earner.
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