US vs. Huawei, existing licenses will be revoked, new licenses will not be approved!
In the last days of Donald Trump’s rule, US policy towards the Chinese company Huawei reaches its maximum degree of rejection. Pending licenses for cooperation with the company are unlikely to be approved and some of the existing ones will even be revoked.
Since mid-September, TSMC has stopped supplying components for Huawei’s needs and now the Chinese giant is forced to be content with stocks created in advance. The US sanctions did not break the will of Huawei, the Chinese company is investing in companies that will help it launch the production of processors in the PRC.
Last year, sanctions against the Chinese company were imposed by the US authorities in two stages. Companies around the world were required to obtain licenses from relevant US departments to trade with Huawei. The August stage of sanctions meant that many previously obtained licenses were invalidated and required re-approval.
According to reports, the US authorities will revoke eight licenses already issued to four companies that cooperated with Huawei. Kioxia and Intel are mentioned among the victims, although neither side gives official comments on this topic. Companies whose interests have been affected by the new wave of restrictions can challenge this decision.
According to the estimates of the primary source, about 150 licenses were pending consideration by the relevant US departments until the last events, but now the bulk of the applications will be considered with a negative result. In aggregate, the restrictions will affect trade in the amount from $120 to $400 million, according to various estimates.
In 2019, even before the first wave of US sanctions came into force, Huawei created a venture capital fund Hubble Technology Investments, with a capital of $417 million and over the next year and a half, with its help, made strategic investments in 25 Chinese companies, twenty of which have relation to the semiconductor sector. Eighteen of these investments took place in 2020 and ten were made after the last wave of US sanctions came into effect last August. The share of the Huawei division in the capital of the mentioned companies, varies from 3 to 15%, but if necessary, it will increase its influence in the necessary areas.