Huawei's Chip Breakthrough Triggers U.S. Scrutiny: The Kiplinger Letter
Advanced chip highlights China's capacity for fighting back against US sanctions.
Huawei Technologies Co. and Semiconductor Manufacturing International Corp., already blacklisted by the U.S., launched a new phone using highly advanced technology that has sparked concern in Washington. To help you understand what is going on in the trade/China landscape and what we expect may happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…
China’s big chip breakthrough is less than meets the eye. Recent news, that telecom giant Huawei collaborated with China’s largest chipmaker, Semiconductor Manufacturing International Corporation (SMIC) on an advanced processor to power its latest smartphone, set off alarm bells in Washington.
But the chip they produced is still five years behind the cutting edge — an eternity in semiconductor time. And without access to more advanced equipment, which is limited by export controls, Beijing will struggle to produce additional breakthroughs, despite heavily subsidizing various semiconductor manufacturing initiatives.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Nevertheless, don’t be surprised if Uncle Sam further tightens restrictions on China’s access to semiconductor manufacturing equipment. By some accounts, U.S. enforcement of export controls has been less stringent than expected, a consequence of industry lobbying.
But critics also say these regulations were poorly designed, allowing China to access less-advanced equipment still capable of making more advanced chips, though not well enough to be commercially viable.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.
Related Content
-
How to Plan a (Successful) Family ReunionFrom shaping the guest list to building the budget, here's how to design a successful and memorable family reunion.
-
These Unloved Energy Stocks Are a BargainCleaned-up balance sheets and generous dividends make these dirt-cheap energy shares worth a look.
-
You've Heard It Before, But This Investment Advice Still Pays Off"Time in the market beats timing the market" ¬— been there, done that, right? But don't write off the underlying advice. There's a reason it's a popular saying.
-
Congress Set for Busy WinterThe Kiplinger Letter The Letter editors review the bills Congress will decide on this year. The government funding bill is paramount, but other issues vie for lawmakers’ attention.
-
The Kiplinger Letter's 10 Forecasts for 2026The Kiplinger Letter Here are some of the biggest events and trends in economics, politics and tech that will shape the new year.
-
Special Report: The Future of American PoliticsThe Kiplinger Letter The Political Trends and Challenges that Will Define the Next Decade
-
Disney’s Risky Acceptance of AI VideosThe Kiplinger Letter Disney will let fans run wild with AI-generated videos of its top characters. The move highlights the uneasy partnership between AI companies and Hollywood.
-
AI Appliances Aren’t Exciting Buyers…YetThe Kiplinger Letter Artificial intelligence is being embedded into all sorts of appliances. Now sellers need to get customers to care about AI-powered laundry.
-
What to Expect from the Global Economy in 2026The Kiplinger Letter Economic growth across the globe will be highly uneven, with some major economies accelerating while others hit the brakes.
-
The AI Boom Will Lift IT Spending Next YearThe Kiplinger Letter 2026 will be one of strongest years for the IT industry since the PC boom and early days of the Web in the mid-1990s.
-
Amid Mounting Uncertainty: Five Forecasts About AIThe Kiplinger Letter With the risk of overspending on AI data centers hotly debated, here are some forecasts about AI that we can make with some confidence.
