Huawei Struggles with Chip Production Under US Restrictions

Under US restrictions, Huawei is encountering significant difficulties in advancing its chip production capabilities. The company has been on the US Department of Commerce's trade blacklist since 2019 due to national security concerns, barring it from accessing American technology without special licenses.

In response to Huawei's predicament, the U.S. government has reportedly urged allies, including South Korea, to impose similar export controls on semiconductor equipment, according to Quartz. This move aims to curb technological advancements that could enhance China's capabilities in both civilian and military sectors.

Despite initial estimates by Huawei and its primary chip manufacturer, Semiconductor Manufacturing International (SMIC), to produce around 500,000 Ascend chips annually, logistical issues regarding component replacement have emerged.

The slowdown in chip production impacts not only Huawei but also Chinese tech giants like Baidu and Alibaba, which have been using Huawei's chips as alternatives to those from Nvidia, a US-based company also subject to export restrictions.

US.Secretary of Commerce Gina Raimondo has expressed concerns about Huawei's chip technology, noting its significant lag behind US-made counterparts and underscoring ongoing efforts to maintain technological superiority and protect national security interests.