Huawei Suspected of Trying to Bypass U.S. Sanctions

Huawei remains blacklisted by the U.S. government as a communications security risk. But that apparently hasn’t stopped it from attempting to bypass sanctions to access advanced chips for 5G smartphones, reports PCMag. Huawei used to produce Kirin chipsets designed by HiSilicon and manufactured by chipmaker Taiwan Semiconductor Manufacturing Co before the U.S. tightened restrictions, reports the Financial Times

Huawei is believed to be “providing support” for a local Chinese company founded in 2021. Pengxinwei IC Manufacturing Co. (PXW) is run by a former Huawei executive and is close to Huawei’s headquarters in Shenzhen. PXW is ordering chip making equipment in order to build a semiconductor fab, a manufacturing plant in which raw silicon wafers are turned into integrated circuits. Those orders include foreign suppliers, which Huawei no longer has access to, notes Bloomberg

It’s unclear if PXW’s plans violate American trade sanctions with China, but the U.S. Commerce Department’s Bureau of Industry and Security (BIS) is watching the startup. The relationship with Huawei hasn’t gone unnoticed. BIS explains it’s “constantly on the lookout for efforts to evade export controls, including those related to parties on the Entity List like Huawei, and uses open-source, proprietary and classified information to substantiate and then, when appropriate, apply our administrative or criminal law enforcement as well as regulatory tools to address violations.”

The company is reworking its phones to use less advanced chips made by Chinese companies that will enable 5G. “This company cannot wait endlessly and needs to bring 5G phones back to the market as soon as possible,” one person familiar with Huawei’s plans told the Financial Times.

 If PXW is allowed to import foreign equipment to manufacture semiconductors, the company expects to start producing chips in 2025. It’s unclear if Huawei will be a customer for those chips, but the strong link between the two companies at this early stage suggests Huawei would likely benefit from PXW’s success, especially when it comes to producing networking hardware, notes PCMag.

By Leslie Stimson, Inside Towers Washington Bureau Chief

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