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Huawei’s HiSilicon Chip Unit Takes A Hit from US Gov’t

The United States government’s recent decision against Huawei is a blow to the company’s HiSilicon chip unit. The direct aim of the American government could cause the technology giant to lose grip on its ticket to success.

The division has become the crucial key to China’s goal to achieve innovative semiconductor technology. However, now, the new US government decision can take away its access to these tools.

According to reports, US officials say that it could be the most damaging hit from the US government to the smartphone maker. In addition to that, it functions as a strategic influence tool to block the Chinese Communist Party.

Huawei Technologies denounces the allegations and has called the new decision as arbitrary and even pernicious.

The Chinese technology company established the HiSilicon chip division back in 2004. And following its creation, it has been a major afterthought in the world chip market.

Technology news reports say that American, Japanese, and South Korean companies have greatly dominated the chip manufacturing industry. Huawei’s HiSilicon chip unit is its controversial entry into the industry.

The recent US export control rule aims to bloc HiSilicon’s access to some of its crucial materials. The first is the design software from Cadence Design Systems Inc., Synopsys Inc., and other US tech firms.

The next is the manufacturing power that HiSilicon benefits from, Taiwan Semiconductor Manufacturing Co. Ltd. This company builds state of the art chips for various semiconductor firms across the world.

An expert in the industry said that the US government’s new rule would cut Huawei’s chip manufacturing capabilities. Even if it bounces back, it won’t be at par with other foreign companies anymore.

Though Competition

In the past, Huawei didn’t have such a powerful unit, but through investing millions in modern technology, the research paid off. The company established a 7,000-employee unit that helped propel it to success in the global smartphone market.

The Kirin smartphone processor from HiSilicon is considered a rival to those created by Apple and Qualcomm Inc. Analysts also consider the Kirin to be one of the rarest examples of Chinese semiconductors that competes globally.

Aside from making processor chips, the company also invested in the research and development of 5G technology.

Earlier this year, the company announced that about 8% of 5G base stations it sold last year came without US technology. Instead, the HiSilicon unit’s chipset was used when Washington cut some of its access last year.

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