The US flag and a smartphone with the Huawei and 5G network logos can be seen on a PC motherboard in this image dated January 29, 2020.
Dado Ruvic | Reuters
The global shortage of chips is a highly complex and multifaceted problem, but Chinese tech company Huawei tried on Monday to blame the US for it.
Eric Xu, Huawei’s rotating chairman, said the sanctions imposed on the company over the past two years were “detrimental to the global semiconductor industry” because they “disrupted the trustworthy relationship in the semiconductor industry.”
The demand for chips has increased during the coronavirus pandemic as people snapped game consoles, laptops, and televisions to try to break the lockdown. The insatiable demand for electronics isn’t the only reason semiconductors are in short supply. The change in business models in the industry has also led to a bottleneck in outsourced chip factories. The relatively small number of chip manufacturing plants and the lack of competition are another major problem.
Despite all of these factors, Huawei tried Monday to place most of the blame on US sanctions.
Speaking to analysts in Shenzhen at Huawei’s Analyst Summit, Xu said, “The US sanctions are the main reason big companies around the world panic.”
He added, “Some of them have never stocked anything, but because of the sanctions, they now have three or six months of supplies.”
Huawei itself has built up a stash of chips to ensure that its business – which focuses on telecommunications equipment and consumer electronics – can continue to run normally.
Some companies in other industries, such as the automotive sector, have had to temporarily cease operations due to the shortage of chips. American auto executives and technology leaders were due to meet remotely with President Joe Biden on Monday.
The US imposed sanctions on Huawei after accusing it of installing back doors in its equipment that could be used by the Chinese Communist Party for espionage purposes.
In 2019, Huawei was placed on a US blacklist called the Entity List. This prevented American companies from exporting certain technologies to Huawei. Google eventually cut ties with Huawei, which meant the Chinese giant couldn’t use Google’s Android operating system on its smartphones. Last year, the US decided to exclude Huawei from key chip consumables for its smartphones.
Huawei strongly denies the US allegations.
$ 1 billion in self-driving cars
Huawei is breaking new ground after the sanctions imposed by the Trump administration left the once-leading smartphone business in ruins while hampering progress in the semiconductor and 5G businesses.
Xu said he didn’t expect the Biden administration to change the rules anytime soon, and that the company was investing in new areas like healthcare, agriculture and electric cars to mitigate the effects of a US blacklist
“We believe we will live and work under the company list for a long time,” he said. “The overall strategy and specific initiatives for Huawei are all designed and developed to allow the company to survive and evolve while staying on the company list for a long time.”
Huawei said Monday it plans to invest $ 1 billion in self-driving and electric car research and development to compete with Tesla, Apple, Nio and Xiaomi.
According to Xu, Huawei’s self-driving technology already outperforms Tesla’s, as cars can travel more than 1,000 kilometers without human intervention. Tesla’s vehicles can’t travel more than half a mile, and drivers are advised to keep their hands on the wheel for safety.
Huawei will initially partner with three self-driving car makers including BAIC Group, Chongqing Changan Automobile Co and Guangzhou Automobile Group. A new “HI” logo (Huawei Inside) will be featured on cars, as will the Intel logo on some computers.
“Once self-driving is achieved, we can disrupt all related industries, and we believe that in the foreseeable future, the next decade, the greatest opportunity and breakthrough will be in the automotive industry,” said Xu.
Correction: This story has been updated to reflect that Huawei’s Eric Xu is one of three rotating chairpersons.