The US has recently revoked certain licenses that allowed the sale of chips to Shenzhen-based Huawei, in an effort to reduce China’s dominance in the technology sector. This decision is part of the ongoing evaluation by the US Department of Commerce on how to protect its national security interests in the face of a rapidly evolving digital threat landscape.
In 2019, Huawei was added to an “entity list” due to concerns about its ties to the Chinese military, but despite facing stringent trade regulations, the company has shown resilience, particularly in its consumer business. The recent launch of the Mate 60 Pro, which uses chips from top Chinese chipmaker SMIC, has contributed significantly to its global success.
While Huawei may not be among the top five smartphone brands for global shipments, it saw a significant 70% year-on-year increase in shipments in mainland China in Q1 2024. This rise in market share highlights the diverse digital landscape in China, with OPPO, HONOR, vivo and Apple each accounting for between 15-16% of the market.
The US government’s actions reflect escalating tensions between the two nations as intertwined economic and geopolitical interests have become increasingly apparent in recent years. However, these restrictions have been slow to develop and have limited effectiveness due to allowing both sides time to adjust.