“Huawei has been able to survive what can arguably be the most extensive sanctions by a country or group of nations in the history of modern business. As a result, its prospects appear more promising than ever.

THE launch of Huawei’s latest mobile phone should not have happened, according to the plan of US strategic and foreign policymakers.

Over the past five years, the administrations of former US president Donald Trump and current President Joe Biden have employed various tactics to impede the growth of the Chinese semiconductor industry. These tactics include blocking its access to advanced semiconductors, chip-making equipment and supercomputer components.

The number one target in the crosshairs of the US has been Huawei, China’s telecommunications manufacturing giant, which in 2012 overtook Ericsson as the world’s largest telecommunications equipment provider and in 2018 displaced Apple as the second largest smartphone manufacturer.

The centrepiece of US policy to gain the upper hand in the battle for global technological superiority, in which semiconductor chips are regarded as the game changer, has revolved around efforts to discredit Huawei. These efforts have relied on baseless and unproven allegations that Huawei’s equipment can facilitate espionage by the Chinese government against the US and is, therefore, perceived as a threat to the US and its allies’ national security.

These efforts began with the blacklisting of Huawei by the Trump administration in 2019. Subsequently, the Federal Communications Commission categorised Huawei as a national security threat and issued an order in 2020, instructing US carriers to remove Huawei equipment from their networks.

In response to US pressure, Australia, Japan, the UK, Canada and Sweden followed suit in banning the use of Huawei 5G equipment.

However, the great majority of the world’s nations, including Malaysia and other Asean countries, chose not to adopt similar measures.

In light of this, the Biden administration intensified its efforts to counter China’s and Huawei’s development in semiconductor manufacturing.

Taiwan, the Netherlands and Japan were “persuaded” to block exports of advanced chip-making equipment to China as part of the US plan to extend the timeline for China to achieve self-sufficiency in semiconductors by a decade or more. This move was aimed at thwarting China’s ambition for self-sufficiency and ensuring it faced challenges in achieving that goal.

‘Thermonuclear bomb’

In October 2022, the Biden administration set off what has been described as “a thermonuclear bomb” at the heart of Beijing’s technology industry.

New export rules were announced, which included a measure to cut China off from specific semiconductor chips produced worldwide with US tools.

At the same time, as part of these rules, “US persons” who supported the development or production of certain chips in China were required to obtain a licence to do so.

According to one analyst: “With the new Biden sanctions, all American suppliers of IP (Internet Protocol) blocks, components and services departed overnight – thus, cutting off all services to China.

“Long story short, every advanced node semiconductor company is currently facing comprehensive supply cut-off, resignations from American staff and immediate operations paralysis. This is what annihilation looks like – China’s semiconductor manufacturing industry was reduced to zero overnight. Complete collapse. No chance of survival.” (Posted at Jordan Schneider’s Twitter account @jordanschnyc)

Huawei and China fightback

In a news story that is still reverberating around the technology world, Huawei recently launched its latest series of Mate smartphones.

The low-key unveiling coincided with the visit of US Commerce Secretary Gina Raimondo to Beijing. Technical analysts who examined the smartphone’s internals responded with enthusiasm, commending Huawei for pushing the boundaries of innovation and delivering cutting-edge technology at affordable prices for users.

The smartphone and technology pages of the internet have been abuzz over Mate 60’s impressive features – powerful Kirin 9000 chipset, curved OLED display, triple rear camera system, a 13-megapixel front camera and a 3D depth camera for secure and accurate face recognition, 5G speed and fast charging capabilities.

Rave reports have also emerged of its potential 6G feature, which enables satellite communication and the Internet of Everything.

It is possibly the first mainstream smartphone that can support users without access to conventional networks during an emergency. Such a feature will also be useful to communities from the US and its allies during a catastrophe.

With projections from some analysts estimating Mate 60 and Mate 60 Pro sales to reach 15 million or more, Huawei has been able to survive what can arguably be the most extensive sanctions by a country or group of nations in the history of modern business. As a result, its prospects appear more promising than ever.

At the same time, Huawei’s continued presence can be seen as a blow to US attempts to thwart China’s progress and capabilities and cause harm to its economic and technological sectors.

This move of imposing sanctions on Huawei and China illustrates how such measures can backfire when faced with a determined opponent.

In the case of Huawei, sanctions forced the company to reduce its reliance on the US as well as pushed it into a partnership with Chinese chip manufacturer Semiconductor Manufacturing International Corporation to develop a seven-nanometer superchip that the Chinese were not expected to manufacture for at least another five to 10 years.

The US, instead of focusing on its technological base to meet the Huawei challenge, now appears determined to apply even more sanctions on the company.

During the latest press conference addressing the US response to Huawei, a spokesperson for the Chinese Foreign Ministry, Mao Ning, was asked to comment on the official probe conducted by the US government into the advanced Chinese-made chip used in Huawei’s latest smartphones.

The spokesman said: “We oppose politicising trade and technology issues and overstretching and abusing the concept of national security. The US has abused state power to suppress Chinese companies.

“Sanctions and curbs will not stop China’s development. They will only strengthen China’s resolve and capability to seek self-reliance and technological innovation.”

Meanwhile, the US stock market has been impacted by the economic costs of Huawei’s latest product launch. With the introduction of Mate 60, the US, Dutch and Taiwanese telecommunication companies, wireless chips provider Qualcomm, semiconductor equipment systems provider ASML Holding, chipmaker Taiwan Semiconductor Manufacturing and chipmaker Broadcom have lost billions of dollars.

As for US technology titan Apple, analysts have forecasted that the company may experience a decline of up to 10 million iPhone sales to Huawei. Since Huawei’s Mate launch, Apple Inc’s share price on the Nasdaq has dropped from US$190 (RM889.50) to US$175 (RM819.25).

Lim Teck Ghee’s Another Take is aimed at demystifying social orthodoxy. Comments: letters@thesundaily.com