US sanction Archives - Gizmochina

Huawei sees largest ever profit decline due to US sanctions

Sean — Tue, 04 Apr 2023 11:54:15 +0000

During its latest earning calls, Huawei has revealed that it saw its largest ever decline in profit. The company saw its biggest annual decline in profits due to the impacts of the sanctions imposed by the US government.

The Chinese consumer electronics and telecommunications giant said that it saw a net profit of a total 35.6 billion Yuan (roughly 5.18 billion US Dollars) for the year 2022. This marked a whopping 69 percent year on year decline. The fall in profits is the biggest ever since the 54 percent annual decline that it saw back in 2011. One of the reasons for the massive decline is due to the massive rise in profits after it sold of its subsidiary, Honor, back in 2021.

This made the decline in 2022 appear quite a bit larger. Huawei also pointed at the rising prices of commodities along with China’s strict pandemic controls last year and the rise of its research and development expenditure as few of the reasons for the decline in profit. According to Huawei’s Rotating Chairman Eric Xu, “In 2022, a challenging external environment and non-market factors continued to take a toll on Huawei’s operations.”

He further added that “In the midst of this storm, we kept racing ahead, doing everything in our power to maintain business continuity and serve our customers”. But despite its largest ever profit fall, Huawei actually a saw a rise in revenue of a meager 0.9 percent to 642.3 billion yuan in 2022.

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Apple halts plans for using China’s YMTC chips over pressure from the US

Sean — Tue, 18 Oct 2022 10:21:15 +0000

Pressures from the US have apparently led to Apple halting some of its plans to use chip technology that originates from China. The company is now putting its plan to use YMTC (Yangtze Memory Technologies Co.) memory chips on hold.

According to a NikkeiAsia report, multiple sources close to the matter have revealed that the halting of the plan arrives after the latest rounds of US export controls that were imposed against the Chinese tech sector. Furthermore, the news is also indicative of Washington’s crackdown and is disrupting the supply chain as well. Notably, the Cupertino based giant had already completed the process to get approval to use the YMTC’s 18 layer 3D NAND flash memory and also got it certified before using it on iPhones.

However, the US government has since put out tighter restrictions around exports from China earlier this month. Interestingly, YMTC’s 128 layer chips are one or two generations behind competition like Samsung and Micron, but they are also around 20 percent cheaper than other leading rivals. Now, growing geopolitical pressure and criticism from US lawmakers have apparently led to Apple halting its plans for this deal.

As per one of the sources, “The products have been verified, but they did not go into the production lines when mass production of the new iPhone began.” Another source added that “YMTC is government-subsidized so they can really outprice competitors.” Meanwhile, Brent Fredberg Brandes Investment Partners’ director of investments stated that “Apple may continue wanting to use YMTC in the local market for China. But the way the regulations are set up currently, it’s very unlikely that YMTC will even be able to supply the kind of NAND chips in a couple of years that Apple would want.”

US may relax some restrictions on Huawei as it aims to retain its global tech lead

Sean — Mon, 12 Sep 2022 11:12:53 +0000

Just a couple of years ago, Huawei had been one of the biggest smartphone makers and was even set to topple both Apple and Samsung for the throne. However, it soon got hit with sanctions from the US, which essentially crippled its smartphone operations as a whole. But now, it appears that there might soon be some changes that help improve its situation.

For those unaware, the Chinese tech giant got hit with various restrictions that took away its access to technologies that originate from America. This basically had it lose its supply to crucial technology for its products. Furthermore, the US had followed up this with more sanctions that cut off Huawei from its primary chip supplier, TSMC. Since then, the company has launched just two flagship series, with both of them only supporting 4G networking despite the chips being used were flagship top end Qualcomm Snapdragon chips.

After Joe Biden became the new president, many had hoped that the new administration would lift some restrictions against Huawei. But this was not the case. However, it appears there will be some changes, with a Bloomberg report claiming that the US Commerce Department’s Bureau of Industry and Security issued a rule allowing certain low level technologies to be shared. In other words, some technologies can be shared to sanctioned entities like Huawei.

Alan Estevez, the Commerce undersecretary for industry and security stated that “US stakeholders need to be fully engaged in international standards organizations, particularly where the critical but sometimes invisible standards that they set have important national security as well as commercial implications.” In other words, this might be some positive news in a while for the Chinese smartphone maker.

Huawei & ZTE to face Ban in Canada on National Security grounds

Sudhanshu — Fri, 20 May 2022 12:23:11 +0000

Canada, the only member of the “Five Eyes intelligence-sharing network” that has not banned Huawei’s 5G equipment in their country, recently announced that it plans to ban Huawei Technologies Co Ltd and ZTE Corp’s 5G tech from the country.

For those unaware, the Five Eyes is an intelligence alliance comprising Australia, Canada, New Zealand, the United Kingdom, and the United States.

According to a Reuters report, Canada’s Industry Minister Francois-Philippe Champagne said, “We intend to exclude Huawei and ZTE from our 5G networks.” He added, “Providers who already have this equipment installed will be required to cease its use and remove it under the plans we’re announcing today.”

According to the recently announced plans, companies will be required to remove their 5G gear by June 2024 and will not receive any reimbursements for the gear. On the other hand, companies using Huawei or ZTE’s 4G equipment have a window till the end of 2027 to remove it.

China has expressed opposition to this decision, with the country’s foreign ministry spokesman, Wang Wenbin, stating, “We will take all necessary measures to safeguard the legitimate interests of Chinese firms.” A spokesperson for the Chinese embassy has accused Canada of working with the United States to suppress Chinese companies.

Alykhan Velshi, vice president of corporate affairs for Huawei in Canada, said in an interview with the Canadian Broadcasting Corp that the company is still waiting to hear “what sort of national security threats they think Huawei poses”. He added that Huawei still has 1,500 employees in Canada, mostly in research and development, and sold products like mobile phones, and would continue to do so.

Huawei Canada has also released an official statement on the matter, stating the following.

Huawei Canada is disappointed by the Canadian government’s decision. This is an unfortunate political decision that has nothing to do with cyber security or any of the technologies in question.

Over the past 13 years, Huawei Canada has devoted itself to helping Canadian carriers build out their wireless networks and provide quality services for the Canadian people. Huawei equipment, including both hardware and software, has been routinely and closely scrutinized by the government and its security agencies according to stringent quality standards. There have been zero security incidents caused by Huawei equipment throughout this entire period. We are proud of our security record in Canada.

Banning Huawei’s equipment and services will lead to significant economic loss in Canada and drive up the cost of communications for Canadian consumers. Unfortunately, this decision is beyond our control as a business. However, we will do everything in our capacity to protect the legitimate rights and interests of our customers, partners, and ourselves. We thank all of our Canadian partners, customers, and consumers for their ongoing support, and look forward to contributing to future network rollout in Canada when conditions permit.

The ban was widely expected and was delayed due to diplomatic tensions between China and Canada after the arrest of Huawei Chief Financial Officer Meng Wanzhou in Canada on a U.S warrant.

To recall, Canada first announced its plans to review Huawei equipment on the grounds of national security back in September 2018. Later that year, Huawei’s Chief Financial Officer Meng Wanzhou was arrested in Canada leading to long-running diplomatic tensions between the two nations that ended with Meng Wanzhou’s release in September last year.

Huawei pushes for advanced semiconductors while retaining HiSilicon workforce: Exec

Sean — Mon, 14 Jun 2021 09:26:58 +0000

Huawei Technologies is apparently determined to develop cutting edge advanced semiconductors. The news arrives despite the company facing US sanctions that cut off its ability to acquire semiconductors from its primary chip supplier, TSMC.

According to a NikkeiAsia report, the Chinese tech giant is resolute in developing class leading semiconductor technology, as per Catherine Chen, a Huawei director and senior vice president. The official also added that the firm has no plans on restructuring its chip design unit, HiSilicon. In other words, the company won’t be laying off anyone from its subsidiary. At the moment, the HiSilicon had more than 7,000 workers back in 2020. This sizeable number would likely be hard to maintain considering the unit is expected to be unable to contribute to the company’s earnings for what could be years.

Although, Chen stated that the company is privately held and is unaffected by external forces, while its management has indicated that it intends to retain HiSilicon despite the US sanctions. The chip designing unit was founded back in 2004 and is considered one of the most advanced chip developers in the world, also known for making the Kirin lineup of processors for Huawei’s smartphones.

In the first quarter of this year, the unit brought in 385 million US Dollars in sale, which marked a sizeable drop of 87 percent from the firm’s highest ever sales from back in Q2 2020. Chen further added that the company will not reduce HiSilicon’s workforce and will continue to develop semiconductors and will manage despite the sanctions that are expected to remain for two to three years. the company would also be promoting their own semiconductor industries and will help HiSilicon gain new supply chain partners that do not rely on US technology.

SMIC receives license to trade with US firms for matured process equipment: Report

Sean — Thu, 04 Mar 2021 12:01:48 +0000

SMIC, China’s largest chip maker, has apparently received a license to import matured process equipment from American firms. The news arrives amid the global chip shortage, which experts believe was further aggravated by the Trump-era regulations.

According to a GlobalTimes report, the Chinese semiconductor based firm has received license to trade with at least one US based supplier. Although, the government has yet to allow SMIC access to advanced processes like 7nm or below technology. Experts believe that the primary reason for allowing SMIC to import with America is due to the Trump administration’s sanctions disrupting supply chains and even hurting the interests of many local firms.

The report adds that the Chinese chip maker has received access to US licenses to import equipment for use in mature processes, with one US supplier already receiving the license, while two other firms are awaiting approval at the moment. Both companies are also expected to likely receive the license to trade with SMIC as well. Currently, the Chinese tech giant has access to 14nm and above processes and not the 10nm or below processes.

Xiang Ligang, an independent analyst, added that the US will probably gradually ease supply restrictions of chip equipment to China based firms, but are also likely to control the advanced technologies like 7nm or below for a while. Xiang further added that “The US government ban on Chinese semiconductor sector has not only disrupted global semiconductor supply but also hurt the interests of their own companies as well. I believe the Biden administration is moving to correct the situation.”

Huawei turns to other businesses to make up for its loss of the smartphone market

Jed John Ikoba — Mon, 22 Feb 2021 19:25:55 +0000

Chinese tech giant Huawei has had a mixed bag of fortunes within the past year. It had come under severe and debilitating restrictions by the US government which accused it of being a front for the Chinese government and as such, a huge security threat that US businesses should not relate with. The impact of the ban is still being felt by the tech giant as it altered significantly the growth plans of its smartphone business and led to the sales of the Honor brand to shore up its investment and possibly ensure the Honor smartphone arm did not collapse under the weight of the sanctions.

Huawei however continues to insist that it had no ties with the Chinese government and is not on any espionage for the Chinese government. It claims it has suffered a grave injury under the unfair and unwarranted US restrictions that have completely alienated the company from its US suppliers. Huawei has been unable to access 5G chips and hardware for its base stations, as well as software components for its flagship 5G smartphones.

Now, Huawei is turning its attention to other business models and one of them is about providing its advanced tech expertise to assist pig farmers to personalize the monitoring and dieting process by using facial recognition technology. This is in addition to a number of non-core technological areas the company is gradually delving into like mining. Earlier on, it was revealed that the computer was also shifting focus to cloud computing.

Huawei continues to develop its brand along these non-core lines as it seeks to come out from the burden of the US sanctions, which industry watchers say might not be lifted anytime soon even with the change of government from Trump to Biden.

The company, it has to be stated, has not completely jettisoned its smartphone business. It is still pursuing growth in that segment, with a scheduled release of two high-end smartphones shortly deploying its Harmony OS on the devices. This will be a significant leap for the company, as it continues to sidestep the US restrictions.

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