Exclusive US approves Huawei’s license to buy auto chips – source

Aug 25 (Reuters) – US officials have approved multi-million-dollar license applications for China’s blacklisted telecom company Huawei to buy chips for its growing auto component business, two people familiar with the matter said.

Huawei, the world’s largest telecommunications equipment maker, has been hit by trade restrictions imposed by the Trump administration on the sale of chips and other components used in its network gear and smartphone businesses. The Biden administration is tightening a tough line on exports to Huawei, denying Huawei a license to sell chips for use in or with 5G equipment.

But in recent weeks and months, people familiar with the application process told Reuters that the US has authorized suppliers to sell chips to Huawei for vehicle components such as video screens and sensors. The approvals come as Huawei shifts its business toward goods that are less vulnerable to US trade sanctions.

Auto chips are generally not considered sophisticated, thereby lowering the bar for approval. A person close to the approval of the license said the government is giving licenses for chips in vehicles that may have other components with 5G capability.

When asked about automotive licenses, a US Department of Commerce spokesperson said the government continues to implement licensing policies “to restrict access to Huawei’s goods, software or technology that are incompatible with US national security and foreign policy.” interests may be harmed.”

The person said the Commerce Department has been prohibited from disclosing the approval or denial of a license.

A Huawei spokesperson declined to comment on the license, but said: “We are positioning ourselves as a new component provider for intelligent connected vehicles, and we aim to help car OEMs (manufacturers) make better vehicles.” I have to help.”

Citing threats to US national security and foreign policy interests, the US has tried too hard to slow the growth of Huawei’s major communications-related business.

After placing Huawei on a US Commerce Department trade blacklist in 2019, which banned the company from selling US goods and technology without a special license, the US last year limited sales of chips made overseas with US equipment. sanctions were revoked. It also campaigned for allies to exclude Huawei from its 5G network due to espionage concerns. Huawei has denied the allegations.

Huawei reported its biggest revenue decline in the first half of 2021, after US sanctions forced it to sell a part of its once-dominant handset business and before new growth areas are fully mature.

Outlining the shift to smart cars, the company’s rotating chairman Eric Xu, at the Shanghai Auto Show earlier this year, called on three, including BAIC Group, to supply a smart vehicle operating system called “Huawei Inside”, a smart vehicle operating system. Announced agreement with state-owned Chinese car makers.

A source said that in another sign of Huawei’s ambition in the space, after suppliers have received authorized licenses to sell chips worth tens of millions of dollars to Huawei, the company has requested that they re-apply and one or more Request higher values ‚Äč‚Äčlike two billion. . Licenses are usually good for four years.

Richard Barnett, chief marketing officer of a global electronics consultancy called Supply Frame, said Huawei is in the “early inning” of investing in the $5 trillion automotive market, which has huge potential growth both inside and outside China.

“Cars and trucks are now computers on wheels,” Barnett said, “that convergence is driving Huawei’s strategic focus to become a bigger player in that area.”

Editing by Chris Sanders and Edward Tobin

Our Standards: Thomson Reuters Trust Principles.

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