US Officials Grant Licenses Authorizing Companies To Supply Chips to Huawei for Auto Components

Kimberly Redmond  |

Video source: YouTube, Reuters

US officials have given permission to American companies to sell microchips to blacklisted Chinese telecommunications giant Huawei Technologies Co for its growing auto components business.

Citing sources familiar with the matter, Reuters reported on Wednesday that the license application approvals are worth hundreds of millions of dollars.

Shenzhen-based Huawei, the world’s biggest maker of telecommunications products, has been impacted by strict restrictions imposed by the White House amid concerns the company is a national security threat.

Under the Trump administration, trade restrictions were enacted on the sale of chips and other parts utilized in Huawei’s network technology and smartphone businesses. The Biden administration has continued to take a hard line on exports to Huawei and has rejected licenses to sell microchips to be used with or in 5G devices.

According to Reuters, the US is granting licenses for chips in vehicles that may have other components with 5G capability and has issued an unspecified number of approvals for suppliers to sell chips to Huawei for various car parts, like sensors and video screens.

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The outlet also noted that the approvals are the result of Huawei gearing its business more toward goods that are less vulnerable to US-imposed trade bans.

Huawei was placed on the US Commerce Department’s trade blacklist in 2019, which prohibited the sale of US goods and technology to the company without a certain license.  

As a result of the restricted access to chips made with American software and technology, Huawei — which was once number one in the smartphone market — has taken a significant hit

Last year, Huawei sold off its budget smartphone brand and has since shifted its focus to areas such as software and cloud computing.  

On Wednesday, a Commerce Department spokesperson didn't comment specifically on the licenses but told Reuters that the agency is continuing to apply licensing policies “to restrict Huawei’s access to commodities, software or technology for activities that could harm US national and foreign policy interests.”

A Huawei representative said, “We are positioning ourselves as a new component provider for intelligent connected vehicles and our aim is to help car OEMs build better vehicles.”

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Source: Equities News

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