The Chip War: Huawei's Uncertain Future
- Gabriele Iuvinale
- 16 giu
- Tempo di lettura: 8 min
At the heart of 21st-century geopolitical tensions lie not only territorial or commercial disputes but a silent, strategic battle for technological supremacy. The main battlefield is a tiny yet omnipotent object: the semiconductor. In this scenario, the story of Huawei Technologies Co., once an unstoppable giant in global technology, has become the emblem of the "chip war" between the United States and China.
A senior U.S. administration official recently reiterated a firm stance: Huawei's ability to mass-produce advanced artificial intelligence (AI) chips will remain "very limited" in the near future. This statement, more than a mere prediction, is a declaration of intent for a multi-year strategy aimed at containing Beijing's technological ascent, and specifically, limiting Huawei's capabilities.
The American Arsenal: How Washington and its Allies Isolated Huawei
To counter Huawei and China's technological rise, the United States has deployed a complex arsenal of export controls, primarily managed by the Department of Commerce (DOC) through its Bureau of Industry and Security (BIS). Starting in 2019, the Trump administration launched an unprecedented campaign, which has since been continued and consistently intensified by the Biden administration. These actions aim to prevent Beijing from acquiring advanced chips and technologies that could have military applications or strengthen its leadership in artificial intelligence.
An example of this aggressive strategy is the inclusion of Huawei on the Department of Commerce's "Entity List," a blacklist that prohibits U.S. companies from exporting technology to Huawei without a special license, which is rarely granted for critical technologies. The knockout blow then came with the "Foreign Direct Product Rule" (FDPR), a bold move by which the United States extended its jurisdiction globally: this rule stipulates that any company, anywhere in the world, that uses U.S.-origin software or machinery to produce chips, cannot sell them to Huawei without Washington's permission. In essence, this measure cut Huawei off from its previous ability to procure the most advanced chips.
Restrictions were not limited to finished chips but constituted a genuine 360-degree technological blockade. The DOC, particularly with the May 2025 reinforcements, aimed to block China's access to the highest-performing artificial intelligence chips and essential tools for their production, fearing their potential military applications. These measures include crucial technologies for both design and manufacturing, intended to deny Huawei (and China more broadly) the ability to autonomously produce cutting-edge AI chips:
Electronic Design Automation (EDA) Software: Indispensable tools for designing complex circuits of modern processors, dominated by companies with close ties to the U.S., became inaccessible. Recent DOC crackdowns have specifically targeted EDA tools necessary for the most advanced process nodes, such as 3nm and 5nm, which are essential for next-generation AI chips.
Manufacturing Machinery: Essential equipment for various stages of semiconductor production, including extreme ultraviolet (EUV) lithography machines necessary for sub-7 nanometer process nodes, has been placed under severe export restrictions to Huawei.
Further reinforcing this U.S. strategy, Taiwan has also stepped up its own restrictions. As of Saturday, June 14, Taipei officially included Huawei Technologies Co. and Semiconductor Manufacturing International Corp. (SMIC)—the foundry producing advanced chips for Huawei—along with several of their subsidiaries, in an updated list of "strategic entities" in the high-tech raw materials sector. This unannounced change requires Taiwanese companies to obtain government approval before exporting to the listed entities, severely impacting both companies at the forefront of China's efforts to develop cutting-edge AI chip technologies. As early as June 2020, the U.S. Federal Communications Commission (FCC) had already identified Huawei as a "national security threat." These new Taiwanese restrictions could severely limit Huawei's access to crucial Taiwanese technologies, materials, and equipment for semiconductor manufacturing, which are vital for producing AI semiconductors, like those supplied by Taiwan Semiconductor Manufacturing Co. (TSMC) for giants such as Nvidia. It's worth noting that TSMC itself already halted supplies to Huawei in 2020 due to U.S. export controls. Taiwan's updated list also includes Huawei units in Japan, Russia, and Germany. This latest move by Taipei could thwart previously reported attempts by some Taiwanese companies to help Huawei develop a secret network of chip production facilities in southern China, further hindering Huawei's ambitions in the semiconductor sector.
The combined effect of all these measures has been devastating for HiSilicon, Huawei's brilliant chip design division, which has effectively been strangled and isolated from the global semiconductor production and supply ecosystem.
Huawei's Response: The "Sputnik Moment" of the Mate 60 Pro and Production Challenges
Cornered, Huawei did not stand idly by, engaging in significant efforts to develop autonomous capabilities. The most surprising fruit of this commitment came in August 2023, when Huawei launched its Mate 60 Pro smartphone. Inside, the Kirin 9000S processor, an advanced 7-nanometer chip, signaled the company's remarkable resilience. This event was a shock to Washington, perceived as a "Sputnik Moment" that demonstrated Huawei's ability to overcome, albeit with difficulty, some of the restrictions. However, a closer analysis reveals a more complex reality regarding the production of these chips. To produce the 7nm chip, Huawei had to rely on processes that do not include EUV technology, which it cannot access, instead using deep ultraviolet (DUV) lithography machines, an older technological generation. To achieve this, complex techniques such as "multi-patterning" were necessary, significantly increasing costs and the likelihood of defects in production. Consequently, the production yield (the percentage of functional chips per silicon wafer) for Huawei's chips is believed to be much lower than global standards. This makes mass production extremely expensive and slow, effectively limiting the volume of advanced chips Huawei can obtain.
The Challenge of Mass Production and Washington's Tightening Grip on Huawei's AI Future
During a congressional hearing, Under Secretary of Commerce Jeffrey Kessler stated that Huawei will only be able to produce 200,000 of its Ascend AI chips in 2025. To put this number in perspective, the Chinese AI accelerator market alone is estimated at approximately 1.5 million units, and a single advanced data center project like OpenAI's "Stargate" could require around 500,000. These figures suggest that, despite Huawei's efforts, its ability to compete on a large scale in the advanced AI sector remains severely limited by the restrictions.
Despite these figures, Kessler warned: "It is critical for us not to harbor a false sense of security... We should not take too much comfort in the fact that Chinese production of these advanced chips [for Huawei] is relatively limited, because we know they have global ambitions."
To strengthen this strategy, the Bureau of Industry and Security (BIS), Kessler's agency, has requested a significant increase in funding to double the number of export control agents and strengthen global surveillance, signaling a firm intention to enforce sanctions and maintain pressure on Huawei. "It's time for BIS to have the resources it needs to do its job," Kessler affirmed.
Beijing's Countermove: Blocking Mergers and Complex Trade Negotiations
China's response to increasing U.S. and allied pressure is not limited to Huawei's self-sufficiency efforts. Beijing is actively using its geopolitical leverage to target Western tech companies, particularly those critical to semiconductor production. A striking example is the recent postponement by China's State Administration for Market Regulation (SAMR) of the approval for the proposed $35 billion merger between Synopsys, a U.S. producer of chip design tools (EDA), and Ansys, an engineering software developer.
This block, which occurred after Donald Trump further tightened chip export controls against China in late May 2025 (particularly for EDA tools needed for 3nm and 5nm chips), exacerbates trade tensions. The merger had already received clearance from U.S. and European antitrust authorities, making the Chinese move a clear signal of retaliation. Synopsys and Ansys control a significant share of the global electronic design software market, a crucial sector for the semiconductor industry. The Chinese delay not only jeopardizes a deal with a "drop-dead clause" set for January 15, 2026, but also allows Beijing to reduce its foreign dependence, giving domestic EDA startups like Empyrean Technology time to catch up. Although Synopsys has partially resumed some sales in China after suspending them to comply with new U.S. rules, its most critical EDA tools remain under strict control, severely limiting Chinese customers.
Further complicating the picture, the issue of U.S. limits on AI chips destined for China remained unresolved in the London trade talks. Beijing, in fact, did not commit to granting export authorization for certain specialized rare earth magnets, which U.S. military suppliers need for fighter jets and missile systems. The United States, for its part, maintains export restrictions on Chinese purchases of advanced artificial intelligence chips, fearing their potential military applications. During recent talks in London, Chinese negotiators appeared to link progress in lifting export controls on rare earth magnets for military use with long-standing U.S. restrictions on exports of the most advanced artificial intelligence chips to China. This marks a new, complex turn in trade negotiations between the two superpowers, which, having started with topics such as opioid trafficking, customs tariffs, and China's trade surplus, have since increasingly focused on export controls.
Furthermore, U.S. officials have signaled their intention to extend existing tariffs on China for another 90 days beyond the August 10 deadline previously agreed in Geneva, suggesting that a more permanent trade agreement between the world's two largest economies is unlikely to be reached soon.
Conclusion: A Technology Gap Defining Huawei's Future and Global Competition
The U.S. official's statement is not propaganda but a lucid analysis of the current situation. Huawei, despite demonstrating remarkable innovation and resilience in the face of sanctions, is trapped by the limitations imposed on its supply chain. Its ability to compete at the highest levels in AI, and more broadly in the advanced technology sector, depends entirely on its capacity to overcome barriers in the industrial-scale production of advanced chips.
Despite these limitations, Chinese artificial intelligence continues to advance. Recent developments in Huawei chips, particularly with the new Ascend 910D processor, have shown an acceleration towards Beijing's technological self-sufficiency, especially in the artificial intelligence sector. China's successes in this sector stem from a formidable combination of factors: massive government investments, chip smuggling, exploitation of loopholes in U.S. export control coverage, completion of domestic equipment transfers, recruitment of expert talent from major international companies, reverse engineering of foreign technologies, exploitation of state-sponsored economic espionage, and promotion of genuine domestic innovation. All these elements contribute to the pursuit of the goal of "self-sufficiency and self-strengthening" in AI, as recently reiterated by President Xi Jinping.
Considering the events of the past year, there is no doubt that China has narrowed the AI development gap with the United States. Chinese AI startup DeepSeek gained global attention in January by launching an AI-powered reasoning model that it claims was trained with less advanced chips and is cheaper to develop than its Western rivals.
The chip war is a marathon, not a sprint, and largely defines Huawei's future in the global technological landscape. While the United States maintains a decisive advantage today in controlling key technology, Huawei's determination and colossal investments in self-sufficiency suggest that the company will continue to seek every avenue to narrow the technology gap. Huawei's future will largely be decided in the labs where it seeks to innovate and in the foundries where it attempts to produce, always under the shadow of international restrictions.
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