U.S. approves licenses for Huawei to buy car chips

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US officials have approved license applications worth hundreds of millions of dollars for China’s Huawei to buy chips for its growing auto component business. In a report citing two people familiar with the matter, it is understood that the world’s largest telecommunications equipment maker is struggling under the stress of trade restrictions by Washington.

The Trump administration, which blacklisted the Chinese giant, prevented it from acquiring chips and other components used to make network equipment and smartphones.

The Biden administration has stood by that hardline stance on exports to Huawei, denying licenses to sell chips to Huawei for use in or with 5G equipment/devices.

Car chips aren’t too complicated

In recent weeks and months, people familiar with the application process have said that the U.S has granted licenses that authorize suppliers to sell chips to Huawei for vehicle components like sensors and video screens. The approvals arrive as Huawei pivots its business to industries the U.S can’t tamper with too much.

Car chips are generally not sophisticated, which lowers the bar for approval. One person close to the license approvals said the government is granting licenses for chips in vehicles that already have 5G capabilities.

What the U.S. and Huawei had to say about the licenses

When asked about the automotive licenses, the U.S Department of Commerce spokesperson said the government continues to consistently apply licensing policies to restrict the Chinese company’s access to commodities, software, or technologies that could threaten US national security and affect foreign policy interests.

The Commerce Department is not allowed to disclose license approvals or denials, according to the spokesperson.

A Huawei spokeswoman declined to comment on the licenses, saying the company is positioning itself as a new component provider for intelligent connected vehicles to help car manufacturers make better vehicles.