Huawei Develops In-House Chips to Counter US Sanctions and Leap Ahead in the Tech War - Microsoft (NASDAQ:MSFT), Intel (NASDAQ:INTC)

In a move to replace U.S. components in its PC business, Chinese tech giant Huawei Technologies has made significant progress in creating its in-house computer chips

What Happened: Huawei’s chip design subsidiary, HiSilicon, has developed the Kirin X90 chip, which recently received a Level 2 national certification for security and reliability from the government-supported China Information Technology Security Evaluation Centre.

This voluntary certification enables companies to evaluate the security standards of their locally designed and manufactured computers, server CPUs, and systems, often acting as a gateway to adoption.

The company's in-house Kirin 9000C and Kirin 9006C chips, utilized in the Qingyun W515x personal computer and Qingyun L540 laptop, respectively, have already obtained certifications. The Qingyun computer series is tailored for government and enterprise users.

Huawei’s license to use Microsoft Corp.’s MSFT Windows operating system is set to expire this month without renewal. According to a report from the Chinese news outlet Thepaper.cn, the company plans to launch PCs equipped with its own HarmonyOS system later this year.

Why It Matters: This development comes as Huawei seeks to replace U.S. components in its PC business amid ongoing U.S. sanctions. In May, Washington rescinded special licenses that had permitted chip suppliers Qualcomm Inc. QCOM and Intel Corp. INTC to sell older-generation semiconductors to Huawei which was used in its laptops and smartphones.

Furthermore, there are growing concerns in China about the escalating trade tensions with the US. Chinese President Xi Jinping has expressed fears that these tensions might lead to China’s isolation, similar to the Soviet Union’s during the Cold War.

Huawei’s development of its own computer chips and operating system is a significant move in this ongoing tech war, demonstrating the company’s efforts to reduce its reliance on American technology amid increasing sanctions and trade tensions.