Secretive chip startup may help Huawei circumvent US sanctions

08:32 AM IST. When the US government blacklisted Huawei Technologies Co. as a national security threat, it cut the Chinese company off from buying American semiconductors and other critical technologies. If it succeeds in getting off the ground, the startup could effectively enable Huawei to sidestep Washington's efforts to choke off the flow of chips to a company it views as a military and economic threat. The US government is moving beyond blacklisting individual companies like Huawei and Semiconductor Manufacturing International Corp. in favor of broad restrictions on all Chinese companies, including a ban on purchases of artificial-intelligence chips. "Although Huawei does not own any manufacturing facilities for now, it is going to be one of the most important companies in driving China's semi industry due to its products in end-markets such as networking, artificial intelligence computation, cloud, smartphones, IoT and auto," Tammy Qiu, an analyst at Berenberg, wrote in the report in September. The market for chipmaking equipment is dominated by five companies - the Netherlands' ASML and Japan's Tokyo Electron, as well as the US's Applied Materials Inc., KLA Corp. and Lam Research Corp. All of them are subject to complicated regulations that restrict what they can sell to Huawei and other Chinese customers. US companies can't sell anything to Huawei without a special license. Non-American companies like ASML and Tokyo Electron are in murky territory when it comes to companies blacklisted by the US, like Huawei.