Key suppliers granted approval to resume business with Huawei

Key suppliers granted approval to resume business with Huawei
Things are finally looking up for Huawei's smartphone wing.

Due to sanctions imposed by the US, a good many of Huawei's supply chain partners can no longer conduct business with the company. As a result, it can neither make its own Kirin chips nor procure crucial components from other companies.

The restrictions have begun to subside, per a new Financial Times report.

Apparently, the US continues to view Huawei's 5G gear as a security threat, and it has still not permitted the sale of base stations and server processors meant for the company's telecom business.

The report says that the US Department of Commerce is willing to approve components shipments to Huawei as long as the 'technology does not support 5G.'

This has been interpreted by many as a green signal for vendors to resume business with the consumer unit of Huawei, which also includes smartphones, and accounts for over half of its revenue. 

What's not abundantly clear is whether chip makers would be allowed to sell their 5G-capable SoCs to the Chinese company. 

A recent report claims that Taiwan Semiconductor Manufacturing Company, (TSMC) has been granted approval to resume business with Huawei on the condition that chips are manufactured using older lithography processes and not advanced nodes like 7nm and 5nm. 

Samsung and Sony have already resumed business with Huawei

Over 300 companies have applied for licenses so that they can continue doing business with Huawei. A third of them, including Intel and AMD, have apparently been granted approval.

Samsung Display also resumed business with Huawei recently. Sony and image sensor maker OmniVision have seemingly also obtained licenses to supply smartphone camera components to Huawei.

Investment bank Jefferies' analyst Edison Lee believes that Qualcomm and MediaTek will also be given the go-ahead to sell chips to Huawei later this year. 

It was earlier believed that Huawei's smartphone sales would shrink 75 percent because of the sanctions. The company is currently the world's second-largest smartphone seller by volume. Two of its phones were amongst the five biggest contributors to global 5G smartphone revenue in H1 2020.

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