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In A New Sign Of Resurgence, Huawei Sends Surveillance Chips Developed In China: Reuters

In A New Sign Of Resurgence, Huawei Sends Surveillance Chips Developed In China: Reuters
A subsidiary of Huawei Technologies is exporting new Chinese-made chips for security cameras, which is a new indication that the Chinese tech giant is finding ways to get over export restrictions that have been in place for four years, according to a report published by Reuters quoting information from two sources briefed on the unit's activities.
According to one of the sources and a third source acquainted with the supply chain for the sector, the company's HiSilicon chip design section began shipping products to producers of surveillance cameras this year. At least some of the consumers, according to one of the persons informed on the unit, were Chinese.
In recent weeks, Huawei has also announced new smartphones that make use of cutting-edge, allegedly domestically produced CPUs.
The changes show that Washington's export restrictions, which have since 2019 prevented the Chinese tech giant from buying parts and technology from American companies without permission, are being circumvented.
"These surveillance chips are relatively easy to manufacture compared to smartphone processors," said the source familiar with the surveillance camera industry's supply chain, adding that HiSilicon's return would shake up the market.
The company's apparent ability to get beyond American regulations on chip design software is a significant contributing element. Despite being two to three generations behind cutting-edge technology, Huawei stated in March that it had made advancements in design tools for chips produced at and above 14 nanometres.
HiSilicon primarily provides semiconductors for Huawei equipment, although it has also served clients outside the company, including Dahua Technology and Hikvision. It was the leading semiconductor provider to the security camera industry prior to the implementation of U.S. export regulations; brokerage Southwest Securities estimated its market share in 2018 at 60%.
HiSilicon's global market share decreased to just 3.9% by 2021, based on information from consultancy company Frost & Sullivan.
HiSilicon has supplied some low-end surveillance chips since 2019, according to one of the persons briefed on the unit's work, but its focus is on the high-end market and taking back market share from companies like Taiwan's Novatek Microelectronics Corp .
Due to the sensitivity of the subject, all three sources opted not to be named, Reuters mentioned.
There were no comments on the issue from Huawei in the report . 
Late in August, Huawei released the Mate 60 Pro, a new smartphone with a cutting-edge CPU that consumers said was capable of 5G speeds. Chinese state media and the general public applauded the occasion as Huawei's smartphone company making a return after being crushed by U.S. sanctions.
The Mate 60 Pro was studied by research company TechInsights, which discovered that it was powered by a new Kirin 9000S, an advanced chip it claimed was probably built in China by Semiconductor Manufacturing International Corp (SMIC), the leading chip foundry in China.
Regarding the phone's 5G capabilities or how it created the cutting-edge processor, Huawei has not made any comments. Before the United States sanctioned Huawei, HiSilicon collaborated with TSMC in Taiwan to manufacture the Kirin series, which has historically been designed by HiSilicon.
U.S. lawmakers have called for further pressure and "more effective export controls" on Huawei and Semiconductor Manufacturing International Corp (SMIC), China's main chip foundry, in response to the launch.
According to U.S. Commerce Secretary Gina Raimondo, there is no proof that Huawei can mass-produce smartphones with cutting-edge technology.
HiSilicon's access to electronic design automation (EDA) software from Cadence Design Systems Inc., Synopsys Inc., and Siemens AG's Mentor Graphics has been severely restricted by U.S. sanctions. The chip-design industry, which creates designs for chips prior to their mass production, is dominated by the offerings of three businesses.
The Mate 60 Pro and other parts, including its radio frequency power chip, were examined by TechInsights analyst Dan Hutcheson, who noted that this research also revealed Huawei had access to sophisticated EDA tools that "they are not supposed to have."
"We don't know if they got them illicitly, or more probably the Chinese developed their own EDA tools," he said.

Christopher J. Mitchell

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