Huawei, the Chinese telecommunications giant, has claimed that China's semiconductor industry will be "reborn" in the face of US sanctions, according to a report by CNBC on Saturday, April 1.
Eric Xu, the rotating chairman at Huawei, issued the statement on Friday during a press conference, saying that he believes the semiconductor industry in China will take action to strengthen and become self-reliant.
Xu also said that Huawei would support such efforts by the Chinese semiconductor industry.
BARCELONA, SPAIN - FEBRUARY 28: A logo sits illuminated outside the Huawei booth at the SK telecom booth on day 1 of the GSMA Mobile World Congress on February 28, 2022 in Barcelona, Spain. The annual Mobile World Congress hosts some of the world's largest communications companies, with many unveiling their latest phones and wearables gadgets like foldable screens.
US-China Tech War
The US has been imposing sanctions and export restrictions on Chinese firms in recent years as part of its broader battle for tech supremacy. Huawei was blacklisted in 2019 and barred from buying technology from US firms, including the chips required for 5G products.
In 2020, chip limitations were made even stricter against Huawei, effectively cutting it off from the most modern cutting-edge semiconductors it required for its devices.
The US implemented new chip limitations in 2022 to prevent Chinese companies from obtaining crucial chips that may be used for cutting-edge applications, including military purposes.
Despite these sanctions, Huawei claims that China's semiconductor industry will get stronger and become self-reliant. Xu believes that the Chinese semiconductor industry will not sit idly by but will take efforts to become self-strengthening and self-reliant.
He said that he believes that the industry will get "reborn" under these sanctions and will realize a very strong and self-reliant industry.
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China's Tech Reliance
However, experts believe that the new round of US restrictions is likely to harm China's semiconductor industry. A number of equipment and chips produced with American technology are currently prohibited from export to China.
Due to the way the chip supply chain is structured, American tools are utilized throughout the whole chip fabrication process, regardless of where the semiconductor is produced, according to CNBC.
The domestic chip market in China is strongly dependent on foreign technology, and there are not enough businesses there to compete with those in the US, Taiwan, Japan, and South Korea.
China has made self-reliance a priority amid the tech battle with the US, but experts agree that this will be an extremely difficult feat. However, Xu's statement shows that Huawei is determined to support the efforts of the Chinese semiconductor industry to become more self-sufficient.
In related news, Huawei recently reported a decline in profit of nearly 70% in 2022. The Chinese tech giant attributed it to sanctions imposed by the US and the effects of the COVID-19 pandemic.
Huawei's revenue increased by 642.3 billion yuan ($93.5 billion) in 2022 or 0.9%, from the previous year. In comparison to 2021, their net profit for the year dropped by 68.7% to 35.6 billion yuan ($5.2 billion).
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