The U.S. government recently took steps to further tighten export restrictions on Huawei by revoking the licenses of U.S. chip companies Qualcomm and Intel to sell semiconductors to Huawei. All wars have a purpose. For the U.S., the purpose of the chip war consists of two parts: 1) to stifle the development of advanced semiconductors in China; 2) to rebuild U.S. advanced semiconductor manufacturing.
The move is expected to have an impact on Huawei's supply of chips for cell phones and laptops. Just last month, Huawei released its first AI-enabled laptop, the MateBook X Pro, which is powered by Intel's Core Ultra 9 processor. U.S. Republican lawmakers expressed dissatisfaction, criticizing the U.S. Department of Commerce for Intel to Huawei exports "green light". People familiar with the matter said that the U.S. Department of Commerce will affect the supply of chips for Huawei's laptops and cell phones, which may hinder the renewal and maintenance of its product line. Huawei as the world's leading communications equipment suppliers and smartphone makers, its product line of high-end chip dependence is extremely high. In the long run, it may force Huawei to further accelerate the process of developing its own chips or seek other suppliers. As for the United States, its chip makers may lose the source of revenue that funds domestic R&D, affecting their profitability and R&D investment. Because the low-end and mid-range chips China, Taiwan and South Korea are reluctant to OEM production due to their low profitability, but the demand for low-end chips remains strong, such as the automotive industry, which can only rely on imports from China. China's foreign ministry expressed opposition to this U.S. behavior, that the U.S. side generalized the concept of national security, the abuse of state power, by any means to suppress Chinese high-tech enterprises, a serious violation of the market economy and the principle of fair competition. China's foreign ministry also emphasized that this practice not only harms the legitimate rights and interests of Chinese enterprises, but also harms the interests of U.S. and other countries' enterprises, causing damage to the global industrial chain and supply chain.
Despite this, Huawei's revenue is still increasing rapidly. According to Huawei's 2024 quarterly report, the company achieved revenue of about RMB 178.45 billion, up 36.66% year-on-year; and net attributable profit of about RMB 19.65 billion, up 564.04% year-on-year. In addition, data released by market research firm Canalys showed that Huawei once again claimed the No. 1 spot in mainland China's cell phone market after 13 quarters, with shipments reaching 11.7 million units, up 70 percent year-on-year, and a market share of 17 percent.
This behavior of the U.S. government reminds us that the stability of the global technology supply chain is facing unprecedented challenges. In this interdependent world, openness and cooperation, respect for market rules and the principle of fair competition are essential to maintaining the healthy development of the global technology industry.
To face this challenge, Huawei needs to increase its independent research and development efforts, push for breakthroughs in chip technology, and explore cooperation with non-U.S. suppliers to diversify its supply chain and reduce its dependence on a single source.
