HUAWEI SANCTION IN EFFECT

The US led sanctions against Huawei come into effect on September 15, 2020. Pressure against Huawei has been mounting for over 36 months.

Samsung Electronics and SK Hynix will halt their memory supply to Huawei as US sanctions that were announced in May against the Chinese tech giant are set to come into effect. The May sanctions ban Huawei from being able to access core components, such as memory, that are designed and produced with US technologies. After announcing these sanctions, the US in August enforced further restrictions and added 38 Huawei affiliates to its Entity List of companies that are considered as risks to national security or foreign policy interests. Huawei itself, along with hundreds of its affiliates, were added to the list last year. 

The US mistrusts Huawei as the founder and CEO Ren Zhengfei was a former officer with the People’s Liberation Army. Huawei is also privately own and not a listed company which is also questionable.

The US is also concerned about the treatment of Uighurs with government surveillance programs and slave labor conditions in factories. The Chinese government maintains its actions in Xinjiang are justifiable responses to a threat of extremism and terrorism. More likely is that locals object to Chinese imperialism.

In August 2018, Guy McDougall, an American representative at the United Nations Committee on the Elimination of Racial Discrimination, said that the committee had received many credible reports that 1 million ethnic Uyghurs in China have been held in “re-education camps”.

The US Commerce Department on Monday August 17, 2020 announced fresh sanctions that restrict any foreign semiconductor company from selling chips developed or produced using US software or technology to Huawei, without first obtaining a license to do so.

Earlier in May 2020 restrictions pressured TSMC from making and supplying Huawei with chips designed by HiSilicon, a subsidiary of the Chinese company.

SMIC has slowly got their fab online but being owned by Huawei means that they are under the sanctions. SMIC only reached mass production in August. Qualcomm is a customer of SMIC but the sanctions will force them elsewhere. The other fab, HSMC recently became bankrupt before finishing their first line.

The impact of the sanctions against Huawei will hurt their ability to manufacture notebook computers and mobile phones.

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