China blasts new US rule banning use of Huawei's Ascend advanced computer chips

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China has blasted a new U.S. rule against use of Ascend computer chips made by Huawei Technologies anywhere in the world, chafing Thursday against the limitations of a temporary truce in the trade war between the two biggest economies.

Beijing moved ahead, however, with fulfilling its promise to lift retaliatory measures it imposed after U.S. President Donald Trump escalated his trade war, raising tariffs on Chinese products to as high as 145%. One key action was to remove a ban on exports to the United States of minerals known as rare earths that are used in many high-tech products.

Despite the deal struck last weekend in Geneva, frictions remain.

Earlier this week, the U.S. Commerce Department's Bureau of Industry and Security issued guidance saying that Huawei's Ascend semiconductors are subject to U.S. export controls, on the basis that they are thought to employ U.S. technology.

“These chips were likely developed or produced in violation of U.S. export controls,” it said in a statement on its website, adding that “the use of such PRC advanced computing ICs risks violating U.S. export controls and may subject companies to BIS enforcement action.”

China's Commerce Ministry responded that the move was "not conducive to long-term, mutually beneficial, and sustainable cooperation and development between the two countries. The Chinese side urges the U.S. side to immediately correct its erroneous practices,” said ministry spokesperson He Yongqian.

Huawei's Ascend chip is central to China's effort to build its own capacity to build leading edge computer chips and other technologies. Analysts say use of the chip in China's DeepSeek artificial intelligence effort reflects a potential challenge for Nvidia in the global AI market.

He also lashed out against U.S. tariffs on imports of Chinese steel and aluminum, which have not gotten a reprieve after Beijing and Washington agreed to their pause in many tariff increases.

She said the U.S. should give up its use of Section 232 of the Trade Expansion Act of 1962, which gives the president power to impose tariffs on other countries on national security grounds.

In February, Trump drew on that authority to restore 25% tariffs on steel and aluminum that he had imposed during his first term in office.

Speaking at a weekly ministry briefing, He urged the US to end the higher tariffs “as soon as possible."

The 30% levy that America is now imposing on Chinese goods includes an existing 20% tariff intended to pressure China into doing more to prevent the the synthetic opioid fentanyl from entering the United States. It also includes the same 10% “baseline’’ tariff Trump has slapped on imports from most of the world’s countries. The 30% tax comes on top of other levies on China, including some left over from Trump’s first term and kept by former President Joe Biden.

China is imposing a 10% tariff on U.S. products during the 90-day negotiating period.

 AP by ELAINE KURTENBACH

China absolutely won’t accept suppression, vows to safeguard Chinese firms’ right, FM on US curbs on Huawei AI chips

Chinese Foreign Ministry Spokesperson Lin Jian

In response to a recent announcement by the US Commerce Department's Bureau of Industry and Security, which claimed that using Huawei's Ascend chips anywhere in the world violates US export controls and it warned the public about the potential consequences of allowing US artificial intelligence chips to be used to train Chinese AI models, Chinese Foreign Ministry spokesperson Lin Jian said on Friday that the US overstretches the concept of national security, abuses export control measures and long-arm jurisdiction and imposes malicious restrictions and crackdown on Chinese chip products and AI industry based on unfounded accusations.

The US move seriously undermines market rules, disrupts the stability of the global industrial and supply chains, and gravely undermines the legitimate rights and interests of Chinese companies, Lin said. 

China strongly opposes and absolutely won't accept such actions and we urge the US to immediately correct its wrongful practice, stop the reckless suppression of Chinese tech companies and the AI industry, Lin said. China will take resolute measures to safeguard the legitimate rights and interests of Chinese enterprises, Lin said. - By Global Times

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Global ambitions: A man using his mobile phone in front of a billboard in Beijing, China. Huawei says that the first lineup of its PCs has built-in AI features, including DeepSeek-powered apps. — Bloomberg

IN the latest sign that US attempts to choke Huawei Technologies Co are only strengthening it, the Chinese tech giant will next week release its first line of personal computers (PCs) powered by the homegrown HarmonyOS operating system (OS).

The move to challenge the global duopoly overseen by Microsoft Corp’s Windows and Apple Inc’s MacOS was not by choice.

Huawei’s licence to run Windows on PCs expired in March, and America’s blacklisting makes it difficult for US firms to continue to do business with it.

Instead of succumbing to Washington’s squeeze, Huawei has invested heavily in the nearly impossible task of creating an entirely new software ecosystem from scratch.

It will be an uphill battle for HarmonyOS to make a dent, both in China and globally.

The first computers run by Windows or MacOS were released in the 80s and are the foundation – and essentially only options – for most applications and services that PC users rely on.

The diffusion and adoption of a new operating system doesn’t happen overnight.

But if Huawei can succeed in getting developers on board, it has a shot at providing the first real alternative to this two-party standard and offering a Chinese alternative that could eventually erode the long-term influence of Silicon Valley.

The new PCs follow the remarkable gains made by Huawei’s OS for mobile over the past couple of years, unseating Apple’s iOS in domestic market share at a rapid clip.

In early 2023, HarmonyOS’s operating system had just 8% of the mobile market in China, compared to the 72% held by Alphabet Inc’s Google-backed Android and iOS’s 20%, according to Counterpoint Research.

In the last quarter of 2024, however, HarmonyOS commanded 19% – surpassing iOS’s 17% and pushing Android’s share down to 64%.

There are other elements on its side.

Huawei’s homegrown OS aligns with President Xi Jinping’s goal of tech self-sufficiency, meaning it can likely count on government support to boost adoption.

China has a vast domestic market, which means there’s less pressure on Huawei to rely on the United States or foreign consumers as it works out any kinks.

The trade war is pressuring many Chinese to back domestic brands over American alternatives.

Huawei’s hardware empire also gives it a built-in userbase to tap. The company’s strength still largely lies in mobile devices, but it was second only to Lenovo in PC market share in China last year.

Still, headaches were reported with the mobile version, especially related to accessing certain apps that were specifically built for Android or iOS.

Splashy demo videos make the first such PC look like a sleek MacBook, but it’s going to take years for programmers to build out all the applications and products users have grown accustomed to, from Microsoft’s Office suite to Mac’s FaceTime.

By far the biggest challenge, across all devices, remains convincing developers to get on board.

China’s vast pool of engineers gives it an advantage, but Huawei must aggressively incentivise them to build services specifically for HarmonyOS.

It has made some strides. Huawei says that the first lineup of these PCs has built-in artificial intelligence (AI) features, including DeepSeek-powered apps.

State-backed media has reported that they have more than 150 dedicated applications, as well as being compatible with a range of popular Chinese platforms available on mobile.

In its annual report last year, Huawei said that over a billion devices – including phones, tablets and smartwatches – are already running HarmonyOS.

And Huawei has previously signalled global ambitions for its operating system, coinciding with its devices’ increasing popularity across South-East Asia and emerging markets.

A lot of attention has been paid to Huawei’s rise in the hardware sector, and specifically its advances in chipmaking for AI applications.

US efforts to ban advanced semiconductors from China have no doubt slowed AI ambitions. But they have also accelerated Beijing’s development of a domestic and self-sufficient ecosystem.

Most recently, America’s bar on Nvidia Corp’s H20 chips has been criticised for redirecting demand and money toward Huawei’s alternatives. The proliferation of Huawei’s HarmonyOS now makes it clear that we’re seeing a similar scenario play out in China’s software sector.

Washington should assess how its policies have resulted in Huawei growing into the behemoth it is today.

The ramifications extend far beyond potential impacts to US businesses.

In an increasingly bifurcating tech world, Beijing could eventually end up setting the norms and standards that the rest of the world adopts, whether that’s in AI or operating systems. — Bloomberg

Catherine Thorbecke is a Bloomberg Opinion columnist covering Asia tech. The views expressed here are the writer’s own.

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US runs into 'self-imposed obstacles' as Pentagon seeks Huawei exemption

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Containing China's tech devt, abusing 'natl security' will backfire: experts

Huawei defies US sanctions. Cartoon: Carlos Latuff

Despite US media revealing that the Pentagon is seeking an exemption from a 2019 Act that prohibits the US Department of Defense from contracting with entities that use Huawei equipment, Chinese analysts believe it's not a sign that the US will slow down its crackdown on China's technological development, but does show that the US' abuse of the "national security" concept has backfired, and that as Huawei continues to grow, the US will increasingly run into more self-imposed obstacles. 

According to a Bloomberg report released on Wednesday local time, the Pentagon is provoking "a fresh showdown" with Congress, as it feels it cannot avoid doing business with Huawei, the world's largest telecommunications provider. Some US defense officials also warned of the risk of "national security being jeopardized" if the issue is not properly handled.  

Section 889 of the 2019 National Defense Authorization Act, which went into effect on August 2020, prohibits US government agencies from buying or contracting with entities that use Huawei components.

Citing officials, Bloomberg claimed that the Pentagon believes Huawei is "so firmly entrenched" in the systems of countries where it does business that it makes finding alternatives almost a mission impossible, especially given that Huawei accounts for almost one-third of all telecommunications equipment revenue worldwide. 

The Pentagon believes that if all the stipulated restrictions related to Huawei were met, it would also disrupt the Pentagon's ability to purchase the vast quantities of medical supplies, drugs, clothing and other types of logistical support the military relies on, Bloomberg reported. 

Pentagon spokesman Jeff Jurgensen said extending the waiver would allow for purchases if they are deemed to further US national security interests. Senator Mark Warner, chairman of the Senate's intelligence committee, also admitted that a waiver may be necessary, according to the Bloomberg report.  

Sun Chenghao, a fellow and head of the US-EU program at the Center for International Security and Strategy in Tsinghua University, told the Global Times that the Pentagon's reported appeal is more about a technical and business-specific issue, and shows very pragmatic thinking on supply chain and cooperation with other countries.

"It does not mean a shift in the US strategy of containing China," said Sun, "The US' attempt to crack down on Chinese technological development is unlikely to stop." 

So far, the House and Senate committees in charge of the legislation have declined to include a waiver in the 2025 National Defense Authorization Act, according to Bloomberg. In addition, the Biden administration revoked eight licenses in 2024 that allowed some companies to ship goods to Huawei, Reuters reported on Tuesday. 

"The Pentagon's attitudes show that the previous US bill is backfiring, as the US has encountered and has to deal with Huawei's irreplaceability, including Huawei's own technology, as well as Huawei technology integrated into other countries' products," said Lü Xiang, a research fellow from the Chinese Academy of Social Sciences.

If Washington continues its restrictions and containment, it will run into more self-imposed obstacles, Lü noted. 

According to US media reports, four years after Congress ordered local network operators to remove telephone and internet equipment from Chinese companies, there is still much Huawei and ZTE equipment that has not been replaced, especially in rural areas. Only 12 percent of the companies in the Federal Communications Commission program have completed their work, while 40 percent of local network operators cannot complete the removal of Huawei and ZTE equipment due to a 3 billion funding shortfall.

If the "national security threat" claim holds water, isn't the US simply letting Huawei damage its "national security?" Lü asked, "By abusing the concept of national security, the US government has undermined the normal and just market competition."

"America's assassination attempt on Huawei is backfiring. The company is growing stronger and less vulnerable," The Economist said in a headline on June 13.

Huawei is indeed rebounding from the US' crackdown. According to Huawei's annual report released on March 29, the company's global sales revenue in 2023 was 704.2 billion yuan ($96.8 billion), and its net profit rose 144.4 percent year on year. On April 30, Huawei revealed that its profits had soared 564 percent in Q1 of 2024. 

Huawei's growth despite US attempts to write it out of its own and Western allies' markets and industrial chain also shows that the US may be able to achieve some goals in the short term, but it is almost impossible to stifle the global tech giant in the world, Sun said. 

Huawei's development shows the strong resilience of Chinese technology companies, Lü said, "by cracking down on Huawei and protecting its own companies, the US is actually encouraging local competitors to be lazy in innovation. As Huawei gradually makes real breakthroughs, the US goal of containing China's technological development will become increasingly difficult to achieve."

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Officially Huawei became the world’s number one smartphone player after shipping 55.8 million handsets, surpassing Samsung in the second quarter of 2020. — Bloomberg

SMIC'S progress in industry commendable effort despite sanctions

 

TWO weeks ago, without much fanfare or large-scale promotional event, Huawei Technologies launched a surprise pre-sale of its latest Mate flagship model.

This was out of the blue, considering that Huawei suffered for the past three years since the United States trade sanction during the Donald Trump-led administration which placed Huawei on the export blacklist depriving the phone and network giant from key semiconductor components necessary to manufacture its successful premium smartphone products.

At its peak in 2020, Huawei had 38% of China’s total smartphone market share with Vivo coming in second at 17.7% and Oppo coming in third at 17.4%.

Globally, Huawei had just over 10% with much room to catch up to Samsung and Apple, which had an estimated 30% and 26% respectively.

Despite that, it officially became the world’s number one smartphone player after shipping 55.8 million handsets, surpassing Samsung in the second quarter of 2020.

This did not last long, as in the year after the trade sanctions kicked in, Huawei suffered immensely when its revenue for the consumer division plunged 47% in the first half of 2021 and fell out of the world’s top five smartphone maker for the first time in six years. 

 If that wasn’t enough, Huawei had to endure a prolonged winter because of the sanctions with market commentators even speculating they will exit the smartphone market entirely.

To stay afloat, Huawei sold off its entire stake in Honor, the budget range smartphone business for Us$15.2bil to Shenzhen Zhixin New Information Technology Co Ltd, a consortium made up of over 30 dealers and includes a state-owned enterprise of the municipal government of Shenzhen.

Hence, when social media caught wind of Huawei Mate 60 pro with videos of long queues for the launch of the smartphone, it attracted global attention. The two questions on everyone’s mind were, “how did Huawei do it with the sanctions ongoing?” and “is this the start of Huawei’s path to reclaim its smartphone throne?”

For those who are not too familiar, one should understand that chips are denominated in different measurements such as 5nm, 7nm and 10nm. It represents the specific generation of chips made with a particular technology and the smaller numbers represent more advanced and efficient technology.

In the past, these numbers indicated the size of the smallest features or transistors that can be produced on a chip using a particular manufacturing process.

What is interesting about Huawei’s latest smartphone launch is that the Kirin 9000s System on Chip that powers the phone model appears to be manufactured using an advanced 7nm process.

Following the trade sanction which was meant to cripple Huawei’s advancement in smartphone manufacturing, most would assume that Huawei would not have access to advanced chips.

In addition, Semiconductor Manufacturing International Corp (SMIC), China’s state-backed chip manufacturer which is widely regarded to be the top in China, is only capable of producing 14nm at that time. In addition, SMIC has not been able to procure the advanced Extreme Ultraviolet (EUV) lithography systems that are used to produce chips at 7nm and below before they were sanctioned as well.

Based on teardown analysis by reviewers online, the chip’s overall performance seems to match that of Snapdragon 888 or Apple A13 chipsets which were launched in 2019-2020. But for those who might have some familiarity with the chip fabrication industry, this is likely not the case as the 7nm chip could be produced using the older generation deep ultraviolet machines which China manufacturers can still import.

This would require usage of multi-patterning, a technique that has been utilised by Taiwan Semiconductor Manufacturing Company Ltd (TSMC) in 2017 of producing 7nm chips before EUV was introduced.

In fact, SMIC reportedly used this technique to produce a 7nm chip for bitcoin miners last year, so they are no stranger to the technique.

The downside of this technique is that it will waste more time, energy, water, while also resulting in higher defects and lower yield. Hence the cost of production is likely much higher.

Nonetheless, EUV machines are still needed to advance beyond 5nm process, and at 3nm and below, multi-patterning would be required even with EUV machines. Hence, we can say that the real bottleneck of the United States trade sanction will hit it hard beyond 5nm.

Currently, SMIC, while improving, is still lagging its global peers; TSMC and Samsung have already started mass production of chips using the 3nm process in 2022 which is two generations ahead of the 7nm process used by SMIC.

The gap is around four years but without access to EUV machines, it could take much longer for SMIC to reach 3nm. It is important to note that all its competitors are now working towards mass production of 2nm chips in 2025.

Considering how SMIC is also sanctioned by the United States, it is remarkable to see it making progress. SMIC will likely continue to be supported by the Chinese government in developing advanced chips.

So long as self-interest politics remains the priority over mutual prosperity and the technology transfer agenda, we will see companies and manufacturing bases move across regions based on the countries’ political alignments or foreign policies rather than merits.

Apart from the United States and European manufacturers that have been diversifying production out of China, even some Chinese suppliers are building new factories in our country as they do not want to lose their markets outside of China.

For now, most are setting up in the existing states with matured industry supply chains such as in Penang and Johor.

Hence, sad to say, while this fight between the two economic powerhouse is detrimental to the world in the long term, in the short term, it appears that it is good for our nation, and we should continue to capitalise on the opportunity.

At the end of the day, every country, especially the larger economies, hopes to maintain its economic dominance over the rest of the world. This era, thankfully, is not an era where the wars between countries are fought with guns and bullets. It is an era where the race is on technological advancement and scientific breakthrough.

Apart from the semiconductor chip competition that has been ongoing since the start of the United States-china trade war, the Covid-19 global pandemic has raised the awareness for the government on the importance on advancing research and development in the pharmaceutical and healthcare industry.

Even countries with the strongest military power cannot avoid the same fate of being engulfed in the effects of the pandemic like any other Third World country.

Unlike the United States, Europe, Taiwan and South Korea, China started research and development in the semiconductor industry much later. We must remember China only started focusing on developing its advanced chip technology recently.

Before the decoupling with the United States happened in 2020, there was no urgency to do so, given that they could still rely on imported technology.

As nations around the world continue to become more tribal, it is crucial to be self-sufficient, be it in the area of technology development, healthcare or food security. It may take awhile but eventually, government leaders ought to revert to multilateralism and focus on the benefits of building a global economy in the interests of mankind.

That is the best way forward for humanity.

By NG ZHU HANN

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