Back in 2012, concerns about national security led the U.S. House of Representatives’ Intelligence Committee to label tech giants Huawei and ZTE as potential threats. These fears stemmed from allegations that Huawei was spying on U.S. consumers and corporations, though Huawei consistently denied these claims. By 2019, Huawei was added to the U.S. Entity List.
The Entity List is maintained by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS). It stipulates that U.S. firms must obtain a government license before exporting any “U.S.-origin” technology to a listed company. This move effectively cut Huawei off from its U.S.-based supply chain, including tech giant Google. Consequently, Huawei could no longer use Google’s proprietary version of Android, though it managed to pre-install the open-source version of Android on its handsets.
However, this version of Android does not offer the Play Store, nor does it include the default Android apps developed by Google.
A year after being added to the Entity List, the U.S. Commerce Department revised the Foreign-Produced Direct Product Rule. This amendment enabled it to stop Huawei from obtaining any advanced chips produced by a foundry using American-made equipment. Many speculated that this could spell the end for Huawei. Although the company led global smartphone shipments during the second quarter of 2020, surpassing Apple and Samsung, it began to witness a decline by the fourth quarter of the same year.
In response to these challenges, Huawei needed to adapt. As Tao Jingwen, the company’s president of quality, business process, and information technology, stated at an event in Guiyang, Huawei “built an ecosystem entirely independent of the United States.” Its first significant step was the creation of the HarmonyOS operating system, which includes the company’s App Gallery app store.
By 2021, Huawei had launched its own ecosystem, Huawei Mobile Services. Despite the loss of Google’s support, Huawei appeared to be managing well internally. However, outside of China, particularly in Europe, the absence of Google was keenly felt. The company also needed to find a way to access 5G chips. After depleting its inventory of 5G Kirin application processors, U.S. chip designer Qualcomm obtained a license from the U.S. Commerce Department to supply application processors to Huawei. However, these chips were modified to work with 4G signals, not 5G.
Despite the challenges, Huawei continued to innovate. The tech world was taken by surprise in August 2023 when Huawei introduced the Huawei Mate 60 Pro. For the first time since 2020, a Huawei flagship phone was powered by an application processor designed by Huawei itself, the Kirin 9000S. Built by China’s largest foundry SMIC using its 7nm process node, the chipset reintroduced 5G support to a Huawei flagship phone for the first time since the Mate 40 series in 2020.
Why was Huawei added to the U.S. Entity List?
Huawei was added to the Entity List due to concerns about national security. It was alleged that the company was spying on U.S. consumers and corporations.
What impact did being on the Entity List have on Huawei?
Being on the Entity List cut Huawei off from its U.S.-based supply chain, including Google. This meant that Huawei could no longer use Google’s proprietary version of Android.
How did Huawei respond to the U.S. sanctions?
Huawei developed its own operating system, HarmonyOS, and created an ecosystem independent of the United States. It also managed to design its own application processor for its flagship phone, reintroducing 5G support.
