Huawei’s ingenious plan to circumvent the US embargo

Huawei would have found a solution to circumvent the American embargo preventing it from sourcing components from several suppliers. Via a licensing system, the brand let a few Chinese partners manufacture the smartphones.

Huawei’s flagship store in Shenzhen // Source: Frandroid

While its situation was already not encouraging, Huawei recently saw the American embargo against it strengthen under the leadership of President Joe Biden. In other words, for the Chinese giant, it is increasingly difficult to conduct business, especially in the smartphone market.

Today, Huawei cannot install Google services on its smartphones and also has great difficulty obtaining supplies from its suppliers because of Washington sanctions. The simple fact of making devices therefore becomes complicated because of this lack of material.

How Huawei can circumvent the US embargo

Or, Huawei seems to have a plan to circumvent the embargo. According to the sources of Bloomberg Well informed about the case, the Shenzhen group would provide for a licensing system through which it would design smartphone designs that it would license to other companies so that they would manufacture them in its place.

Huawei flagship store in Paris
The Huawei flagship store in Paris // Source: Frandroid

It is these third parties who would then take care of obtaining the necessary components from the suppliers with which Huawei no longer has the right to operate. Bloomberg thus explains that the firm planned to rely on the production lines of the company China Postal and Telecommunications Applicances Co. (PTAC) – it is an entity owned by the Chinese state.

One of PTAC’s subsidiaries, Xnova, already sells smartphones branded “Nova” (a sub-brand of Huawei). In exchange for this partnership, Xnova would also have the right to market smartphones under its own brand, but based on designs provided by Huawei.

Big ambitions

We also learn that Huawei engineers have already begun to reorganize the layout of the internal components of smartphones so that they can accommodate chips from Qualcomm or MediaTek – instead of homemade Kirin.

Huawei would thus aim to significantly increase the production of smartphones and would seek to exceed 30 million deliveries in 2022 by combining devices still produced in-house and those manufactured by this type of partnership.

And the Honor case?

This information also raises some questions around the case of Honor, a former subsidiary of Huawei which became independent a few months ago. The latter could take advantage of this licensing system by taking over designs designed by its former parent company, but taking advantage of Google services on its smartphones.

Beware that said: Honor itself is still in the American crosshairs.

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