Since the National Football League (NFL) regular season started this week, we can use a football analogy for this story. Let’s say a football team – let’s call them Huawei – was about to win the Super Bowl and scored a touchdown on the last play of the game. But just as Huawei celebrated, red, white and blue penalty flags were thrown onto the field by the referees, negating the touchdown and forcing Huawei to forfeit the game.
What we are trying to say is that Huawei was on its way to becoming the largest smartphone manufacturer in the world, a goal it set out to achieve over a five-year period. But just before Huawei could surpass Samsung and Apple on top, the US stepped in and placed Huawei on the Entity List. This prevents the company from accessing its US supply chain including Google Mobile Services (GMS).
Huawei lost the opportunity to buy cutting-edge chips exactly one year after being placed on the Entity List
Exactly one year later to the day, the US Commerce Department changed US export rules that prevent foundries using US technology from sending cutting-edge chips to Huawei. As a result, Huawei’s latest two flagship series (last year’s photography-focused P50 line and the recently unveiled Mate 50 line) only use 4G versions of the top Qualcomm Snapdragon chipsets.
Huawei Mate 50 Pro
Some inside Huawei hoped that when Joe Biden won the 2020 election, the new administration would lift restrictions on Huawei. This has not been the case until now. But change is coming. Bloomberg reported the other day that the US Commerce Department’s Bureau of Industry and Security issued a rule allowing certain low-level technologies to be shared when standards are discussed with organizations that include sanctioned firms like Huawei.
After Huawei was placed on the Entity List in 2019, US technology companies limited their participation in standards-related activities. In Washington, politicians liked the idea of China increasing its participation in these organizations that determine how technology is applied and used worldwide. This gives China, considered a national security threat, an advantage over American companies.
Alan Estevez, the Secretary of Commerce for Industry and Security, said: “US stakeholders must be fully engaged in international standards organizations, especially where the critical but sometimes invisible standards they set have important national security as well as commercial implications.” But to prevent these American firms from having to apply for a license every time they are part of an organization that sets global technical standards, the Commerce Department is easing restrictions on sharing technology with blacklisted firms like Huawei.
The US does not want to give up its leading role in technology
The United States does not want to lose its leading role in technology, and one way to ensure that this does not happen is to allow companies with limited access to the necessary American technology. The Commerce Department has yet to release a list of the technologies it will allow companies like Huawei to share.
Estevez adds that the new rule will allow for “American leadership in these critical bodies.” For companies like Huawei, this is a small relaxation of the constraints it finds itself under. If there is anything positive to come out of this for the Chinese manufacturer, it is that the company has learned that it has the skills to circumvent US restrictions. Without the ability to use the GMS version of Android, Huawei developed its own HarmonyOS, which is now in its third generation.
The company was also forced to develop Huawei Mobile Services (HMS), which is now used by over 700 million users. The move announced by the Commerce Department will not immediately improve Huawei’s chances of moving back up the charts. But what it can do is make administration officials more likely to come up with a solution that will appease all interested parties.