Huawei's HiSilicon Bypasses Export Controls, Posing Competition to Apple and Nvidia with Surveillance Chip Shipments

In a notable development, a unit of Huawei Technologies Co, Ltd has begun shipping surveillance camera chips, signaling the company's ability to navigate around four years of stringent U.S. export controls. 

These shipments from Huawei's HiSilicon chip design unit commenced this year, potentially impacting the market, with some of the customers being Chinese, Reuters reports. 

The Apple Inc AAPL rival has been subject to U.S. export controls since 2019, restricting its access to components and technology from U.S. firms, including Nvidia Corp NVDA, without approval. 

However, the recent move to ship surveillance chips suggests Huawei can bypass these restrictions, particularly in chip design software. 

In March, Huawei announced breakthroughs in chip design tools, further enhancing its capabilities. 

HiSilicon, primarily a chip supplier for Huawei equipment, was a dominant player in the surveillance camera sector before the export controls, boasting a global market share of 60% in 2018. 

However, by 2021, its global market share had plummeted to just 3.9%. Despite shipping some low-end surveillance chips since 2019, HiSilicon focuses on the high-end arena and reclaiming market share. 

Huawei also forged a global patent cross-licensing deal with Chinese smartphone company Xiaomi Corp XIACY XIACF, encompassing communication technologies, including 5G.

While these developments may raise concerns among U.S. lawmakers, the U.S. has no concrete evidence that Huawei can produce smartphones with advanced chips in large volumes. 

Morgan Stanley also shares similar views. The situation regarding Huawei's access to electronic design automation (EDA) software and other tools remains complex and potentially contentious. 

As Huawei continues to find ways to adapt and thrive despite export controls, the tech industry and policymakers will closely monitor the implications of these strategic moves.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.