How Huawei is surviving sanctions in the enterprise market

Life has not been easy for Huawei in recent years. At the end of the first decade of the 21st century, it was not only threatening Samsung’s position as the main manufacturer of Android smartphones, but it was an almost unrivaled power when it came to deploying 5G infrastructure, also positioning itself strongly in areas such as WiFi connectivity, servers , storage cabins, etc.

And then came the sanctions. The suspicions (founded or not) on the part of the United States Administration, in which the Asian multinational was pointed out as a technological extension of the Chinese Communist Party, have severely limited Huawei’s access to key technology components and its business in areas such as mobility or networking has suffered significantly.

But as you explained a few days ago ren zhengfei, CEO of the company, it is not the same to be touched as to be sunk. In a speech delivered at Nanjing University, the manager has detailed how the company has had to find “local” substitutes for more than 13,000 components that it could no longer access due to sanctions.

At the same time, he has given details about how Huawei engineers have had to redesign more than 4,000 circuits in order to continue operating in key categories. Finally, and in the field of software, the multinational has spent a few years developing and iterating its Harmony OS, a forks of Android in which it has replaced all Google services with its own.

In addition, and as local media also reported this week, the Chinese technology giant would have developed tools to create processors with 14 nm lithography. According to the Chinese media Yicai, Huawei and its partners in the semiconductor sector have come together to create tools to replace those of US chipmakers such as Cadence, Synopsys and Mentor/Siemens.

These three companies control all of the world’s electronic design automation (EDA) tools used for every step of chip design, from architecture to placement and routing to final physical layout. There are many steps to take before engraving a physical chip, and Huawei’s new EDA tools, although they are not yet in a position to compete with the most advanced in the world, do represent a milestone that is worth considering.

The combined result of all these efforts has been that sooner than expected, the company has managed to stabilize its product portfolio and, more importantly, to return to the path of growth after the initial shock. Of course, it hasn’t been cheap: Zhengfei has stated that in 2022 alone, the company has invested $23.8 billion in R&D.

Despite everything, in some markets Huawei may never recover from the trade restrictions applied in 2019 by the Trump administration, which not only prevent American companies from doing business with the Chinese company, but also prevent those companies from having any business relationship with third parties that sell technology to Huawei.

Thus, China has spent years trying to accelerate its domestic production of semiconductors, although it is still far from its local factories being able to emulate in technological capacity and even in production a TSMC whose plants are located off the coast of the island of Taiwan. . This has led some to suggest that the fact that China insists on its aspirations on the island could be, among other things, related to being able to “put its hands” on a strategic and key industry for its future. TSMC instead has tried to downplay this possibility, noting that its facilities are of little use without a supply chain to back them up.

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