the chess game goes on behind the scenes to evade the embargo

Huawei seems to have found a smart and effective way to avoid the American embargo for which it has been paying the price since 2019. However, the United States does not seem ready to release the ballast in this dragging game of chess.

Huawei Mate 50 Pro // Source: Huawei

When Huawei improves its tower, the United States moves its bishop to close its trap. The Chinese giant tried some maneuvers, but its king remained in a bad position. How will this game of chess played in the background end?

Because this is a chess game between Huawei and the United States. The challenge: the effectiveness of the embargo imposed by the latter on the former. Since 2019, the Chinese group no longer has the right to work with most American companies, which further deprives it of embedding Google and Play Store services in its smartphones. It is also impossible for the brand to access certain technologies because its supply chain is severely hampered.

Huawei is carefully advancing its pawns

A very complicated situation from which Huawei is secretly trying to escape. These are exactly the sources familiar with the claim of the matter, cited by Bloomberg. Thus, the company began to financially support a startup based in Shenzhen. However, according to the American press agency, this young company orders chip-making equipment from suppliers, especially foreign ones, in order to operate it in a semiconductor factory.

The startup in question is officially called Pengxinwei IC Manufacturing Co, but goes by an acronym: PXW. At its head is a former Huawei executive who built facilities near his former company’s headquarters, also located in Shenzhen. Bloomberg claims that public documents and satellite photos can help confirm these allegations.

Huawei Mate 50 Pro // Source: Huawei

Sources at the news agency predicted that Huawei would buy most, if not all, of PXW’s production. The first orders should be placed in the first quarter of 2023. In other words, PXW will allow Huawei to avoid the American embargo, at least in part, to once again be able to supply itself with equipment as it sees fit. which is appropriate. This maneuver is also a continuation of the tricks that the Chinese group has been considering since last year. Huawei just needs to carefully place its pawns on the chessboard.

The United States is ready to attack

The plan would have gone smoothly, but there was a catch. Despite Huawei and PXW’s efforts to be discreet, the startup is now in the crosshairs of the Bureau of Industry and Security (BIS) which depends on the Department of Commerce. The organization explains the Bloomberg have heard of “aAllegations of dealing with Huawei“.

BIS is constantly on the lookout for attempts to evade export controls, including those related to Entity List parties such as Huawei, and uses open source, proprietary, and classified information to verify and then, as appropriate, use our administrative or criminal law enforcement tools. as well as our regulatory tools to address violations.

Therefore, the United States is looking very hard not to lose the game. However, at the moment, it is still unclear whether Huawei’s strategy around PXW actually violates the US embargo. The startup has not officially announced its intention to supply Huawei, because it would fall under sanctions from Washington. It may, however, keep a certain latitude to buy equipment from non-American suppliers, as long as the latter do not use American technologies.

For its part, PXW said it wants to start production lines from 2025, but did not name any customers for now. Initially, the startup will start by working on 28 nm chips. It will be several generations behind the advanced technologies in this area. As a reminder, the 28 nm manufacturing process was introduced to the market around 2011.

Let’s add that this solution found by Huawei, even if it achieves its goal, may not be possible to solve the main problem of the Chinese group, the absence of Google services, but only a few supply problem.

The game is getting bigger

As a reminder, Huawei has been accused by the United States of carrying out espionage operations on Chinese services through telecom infrastructure. The company therefore finds itself at the center of significant tensions between Washington and Beijing. In addition, recently, the United States played a new trick by using a more general embargo.

Recently the Mate 50 Pro debuted in Europe, but cannot take advantage of Google services or the 5G network. So Huawei continues with great difficulty, without saying its last word. The United States cannot yet congratulate itself on checkmate.

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