As Huawei struggles to find alternatives to US chip tech, it finds itself a pawn in a much bigger power game

In the second quarter, Huawei overtook Samsung for the top spot in smartphones and reported a 13.1 per cent rise in first-half revenue, but without chips that cannot last

Beijing is likely to bide its time until the US presidential election, although analysts say a Biden win over Trump will not necessarily provide relief for Huawei

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With Washington tightening its grip over Huawei's access to US core tech like semiconductors, the company is facing an uncertain future. SCMP illustration by Perry Tse

Celia Chen,Che Pan,Jane ZhangandMinghe Hu

Published: 8:30pm, 26 Aug 2020Updated: 10:34am, 28 Aug 2020

As China’s telecoms champion and 5G powerhouse, Huawei Technologies is used to playing the role of king. Lately though, it is finding itself more like a pawn in the great power game between the world’s two superpowers.

The target of crippling US tech sanctions, the Shenzhen-based company has been on the ropes for some time but was able to fight back, even claiming the No 1 spot in smartphones in the second quarter. But with the latest move by Washington to tighten its grip over Huawei's access to US core tech like semiconductors, the company is literally facing a life or death situation.

“The US right now seems to be looking to kill Huawei [to] teach China a lesson,” said Stewart Randall, head of electronics and embedded software at Shanghai-based consultancy Intralink.

So far Beijing has not retaliated with anything other than fiery rhetoric, despite saying 15 months ago it would create an unreliable entity list of US companies operating in China. In response to the latest US move on Huawei, which effectively cuts off its supply of semiconductors altogether, the Foreign Ministry said Washington was weaponising national security issues and abusing state power.

“Retaliation from China isn’t a scenario we see playing out,” said Kenny Liew, telecoms analyst at Fitch Solutions “China still derives a lot of manufacturing value from US OEMs like Apple, and Chinese action will likely motivate the shift of production and assembly lines out of the country.”

For the next 68 days Beijing is likely to bide its time until the US presidential election, although analysts say a Biden win over Trump will not necessarily provide relief for Huawei.