The Financial Times reported that Chinese telecom equipment maker Huawei is focusing on the cloud business to ensure its survival, which still has access to American chips despite the sanctions imposed on the company.

Huawei‘s cloud business sells computing and storage capacity to companies, including granting them access to artificial intelligence, the newspaper reported.

Huawei’s cloud business lags far behind Alibaba and Tencent, but is growing rapidly, and in January, Huawei put the unit on par with smartphone and telecom equipment companies.

Cloud business has been key to Huawei’s stability in its home market because Beijing will increasingly support the company through public cloud contracts.

The change in focus was necessary because the outlook for Huawei’s smartphones and other consumer products unit was hopeless in the face of the US ban that would stifle its access to mobile chips.

Meanwhile, industry executives and analysts said: Vendors of needed semiconductors in cloud computing are still allowed to ship to Huawei, and other components are available in the open market.

Intel was the main supplier of CPU to Huawei servers, as it received a license last year that allows it to continue selling to Huawei.

After the US Commerce Department added Huawei to its list of companies banned from doing business with US companies last year, hundreds of companies applied for temporary licenses.

Despite the rules imposed by the US government prohibiting the sale of any chip designed or manufactured using US technology or equipment in any deal related to Huawei, these licenses remain in effect.

A Commerce Department official told the Financial Times: The rule has no effect on licenses issued before August 17, and the scope of the rule has not changed to include those licenses previously issued.

In the past year, most of the companies that have applied for temporary licenses have focused on designing chips and software because the industry was not expecting Washington to crack down on the entire supply chain, including manufacturing.

For these Huawei suppliers, the exemption became meaningless because the latest rule bars chip makers from shipping to Huawei.

However, some chipmakers have obtained a license, including Intel, and the Ministry of Commerce does not announce which companies obtain the licenses, but Intel has confirmed that they have licenses to ship to Huawei.

And if Intel CPUs are still available, Huawei can use them to replace Kunpeng and Ascend.

Huawei’s cloud CPUs were internally developed based on designs from the British chip company ARM that could no longer be manufactured due to the recent ban.

Source : FT

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