The US government has been targeting Huawei for years. Basically, any US company isn’t allowed to touch Huawei with a ten-foot pole. This also applies to foreign entities whose products may contain US patents. But it seems that recent comments have riled up China, which is now threatening legal action against anyone who helps enforce the chips ban against Huawei.

The Huawei chips ban

This latest escalation is in response to a statement made by the US Commerce Department. The government agency said using Huawei’s semiconductors “anywhere in the world” would violate US export controls. However, that reference was later removed from the comment. In response, China said that any entity that helps the US ban Huawei chips would be breaking China’s Anti-Foreign Sanctions Law. Basically, this law will punish anyone who interferes with China’s internal affairs.

This puts companies in a tough spot. For instance, a recent report suggested that TSMC could face a $1 billion fine issued by the US Department of Commerce. This is because it indirectly supplied Huawei with an AI chip. TSMC didn’t actually sell the chip to Huawei. However, it did sell it to another company, who then used the chip which was found inside Huawei’s Ascend 910B chipset.

Like we said, this makes it incredibly hard for companies to do business. It’s hard to predict where a piece of technology ends up. And now with both the US and China threatening fines and legal actions, companies may simply be too scared to make a move.

Huawei’s slow but steady comeback

That being said, while a lot of these moves are designed to put roadblocks in Huawei and China’s way of developing advanced semiconductors, some have had unintended effects. Recently, the US banned NVIDIA from shipping its H20 AI accelerator to China. This meant that Chinese companies looking to further AI development had to turn elsewhere. And guess who they turned to? You guessed it right—Huawei.

Before this, NVIDIA accounted for 95% of AI chips in China. However, following this ban, Huawei ate into its share and reached 50% of the market. While this move might have prevented US tech from entering China, it gave a Chinese company an even stronger foothold in the market.

Huawei has been clawing its way back ever since it was placed on the US Entity List. We admit we were skeptical of the company’s chances of survival at the start. However, Huawei has made a lot of headway since. The company not only debuted the world’s first tri-fold smartphone but, more recently, beat Apple to the punch with a foldable laptop.

It is also make progress in the development of its own chipsets. Granted, it isn’t on par with Qualcomm yet, but Huawei is slowly, but surely, getting there.