A Huawei Technologies subsidiary is making strides in circumventing U.S. export restrictions by shipping newly developed Chinese-manufactured chips for surveillance cameras, according to sources familiar with the matter.
This marks a significant development for the Chinese tech giant, which has been grappling with U.S. export controls for the past four years.
The shipments originate from Huawei’s HiSilicon chip design unit and commenced earlier this year, with at least some of the customers being Chinese surveillance camera manufacturers.
Huawei has also recently introduced new smartphones equipped with advanced domestically produced chips, hinting at its ability to overcome Washington’s export restrictions that have limited its access to components and technology from U.S. companies without approval.
The shift towards surveillance chips is strategically advantageous for Huawei, as these chips are comparatively easier to manufacture than smartphone processors, according to an industry insider.
The company’s HiSilicon unit appears to have navigated around U.S. restrictions on chip design software, boasting breakthroughs in design tools for chips produced at and above 14 nanometres.
This move could potentially disrupt the surveillance camera market.
While HiSilicon primarily supplied chips for Huawei equipment, it previously served external customers like Dahua Technology and Hikvision.
However, after the imposition of U.S. export controls, its global market share plummeted from an estimated 60% in 2018 to just 3.9% in 2021, according to Frost & Sullivan.
While HiSilicon had shipped some low-end surveillance chips since 2019, its primary focus is now on the high-end segment and regaining market share from competitors like Taiwan’s Novatek Microelectronics Corp.
Huawei has not officially commented on these developments, maintaining a low profile amid the sensitivity of the matter.
In late August, Huawei unveiled the Mate 60 Pro, a smartphone equipped with an advanced chip capable of 5G speeds.
Research firm TechInsights suggests that the chip, the Kirin 9000S, is most likely produced in China by Semiconductor Manufacturing International Corp (SMIC).
The U.S. lawmakers have responded by calling for increased pressure and “more effective export controls” on Huawei and SMIC.
U.S. Commerce Secretary Gina Raimondo expressed doubts about Huawei’s ability to mass-produce smartphones with advanced chips, emphasizing the impact of the sanctions on HiSilicon’s access to electronic design automation (EDA) software from companies like Cadence Design Systems, Synopsys Inc, and Siemens AG’s Mentor Graphics.
TechInsights analyst Dan Hutcheson speculates that Huawei may have acquired sophisticated EDA tools illicitly or developed their own.
These developments underscore Huawei’s resilience in navigating the challenging landscape of U.S. export controls and signal its intent to remain competitive in the global technology arena.