Huawei Technologies has called on a US judge to dismiss most of the federal charges accusing the company of conspiring to steal technology secrets from American firms and misleading banks about its business dealings in Iran. In a court filing in Brooklyn, Huawei described the accusations as part of the Department of Justice’s ‘ill-founded’ China Initiative, aimed at prosecuting Chinese entities. The company argued there is no substantial evidence of a conspiracy and that several charges relate to actions outside the United States.
The telecommunications giant contended that the bank fraud allegations rely on a ‘right to control’ theory of fraud, which the US Supreme Court invalidated in a separate case last year. Huawei, which operates globally from its base in Shenzhen with around 207,000 employees, has pleaded not guilty. A trial is set for January 2026. A spokesperson for the US Attorney’s office declined to comment, and Huawei’s legal team did not respond to requests for remarks.
The case dates back to 2018 and led to the high-profile detention in Canada of Huawei’s Chief Financial Officer Meng Wanzhou. Although charges against her were dropped in 2022, the controversy remains a significant chapter in US-China tensions. The China Initiative, under which Huawei was prosecuted, was initiated during Donald Trump’s presidency to curb alleged intellectual property theft by Beijing but was terminated by the Biden administration in 2022 following criticism of racial profiling and the negative impact on research.
The CEOs of Europe’s top three chip manufacturers expressed concerns about the rising nationalist policies from the US, China, and Europe. They argue these policies are pushing each region to secure its own semiconductor supply, causing significant strain on the global chip industry.
Infineon, STMicroelectronics, and NXP—major suppliers of chips for electric vehicles and industrial technology—highlighted the challenges these policies are creating. Speaking at an electronics conference in Munich, Infineon’s CEO Jochen Hanebeck warned that further fragmentation is likely, particularly through tariffs, which could seriously disrupt global supply chains.
STMicroelectronics’ Jean-Marc Chery pointed out that duplicating supply chains across continents has led to costly investments in both materials and engineering. The pressure to maintain regional independence in chip production is placing an unsustainable burden on resources, he noted, particularly as China’s demand for chips in electric vehicles remains strong.
Kurt Sievers, CEO of NXP Semiconductors, argued that no country could feasibly achieve self-sufficiency in the chip industry. Attempting to do so, he said, would lead to prohibitive costs, making electronic devices unaffordable for consumers. He anticipates governments will eventually realise that global cooperation is essential for sustaining the semiconductor industry.
Vietnam’s semiconductor industry is gaining momentum as foreign companies invest in chip testing and packaging facilities, shifting some production away from China. Amid trade tensions between the US and China, several global players, including South Korea’s Hana Micron and US-based Amkor Technology, are expanding operations in Vietnam to diversify their production bases. Hana Micron has committed over $930 million to boost its packaging capacity, while Amkor is investing $1.6 billion to establish its largest packaging plant, transferring some machinery from its Chinese facilities.
The rise in investment is set to increase Vietnam’s global share in chip assembling, testing, and packaging, with estimates suggesting a rise from 1% in 2022 to around 8-9% by 2032. Domestic companies are also stepping up. Vietnamese tech firm FPT plans to start a testing facility near Hanoi next year, investing up to $30 million, while Sovico Group is seeking partnerships for a chip plant in Danang.
Vietnam’s strategic push into the semiconductor sector has been encouraged by the US, viewing the country as a potential alternative to China for supply chains. The Biden administration’s support, especially as trade tensions grow, has bolstered Vietnam’s role in this industry. With domestic and foreign investments combined, Vietnam is poised to strengthen its position as a key player in the global semiconductor back-end market.
Looking forward, Vietnam is ambitiously aiming to develop its front-end chipmaking capabilities, planning to have its first foundry operational by 2030. Viettel, a state-owned firm, is set to lead this initiative, indicating Vietnam’s broader goal of advancing its semiconductor industry and reducing reliance on foreign production bases.
A top Republican lawmaker has criticised the Biden administration for not taking stronger action against China’s Semiconductor Manufacturing International Corp (SMIC), accusing the company of aiding China’s chip industry and military complex. Michael McCaul, chair of the House Foreign Affairs Committee, called on the US Commerce Department to investigate whether SMIC is violating export controls by producing chips for the sanctioned telecommunications giant Huawei.
In a letter to the Commerce Department, McCaul highlighted concerns over SMIC’s recent advancements, including the production of advanced chips used in Huawei smartphones and plans to supply AI processors for Huawei. He described these developments as a ‘smoking gun’ that could enable China to surpass the US in AI. McCaul has urged the department to halt SMIC’s licenses unless the company undergoes a full audit.
While the US Commerce Department acknowledged McCaul’s letter, it emphasised that it has been tough on China in its enforcement of export controls. SMIC was added to the US restricted trade list in 2020, and Huawei, facing similar sanctions since 2019, have both denied any wrongdoing. The Chinese embassy in Washington has dismissed US criticism, calling it an overreach of national security concerns.
The UK government has ordered China-registered Future Technology Devices International Holding Ltd to sell the majority stake—80.2%—in Scottish chipmaker FTDI, citing national security concerns. The government voiced concerns that UK-developed semiconductor technology and intellectual property could be misused if controlled by foreign interests that have been considered potentially harmful.
This directive requires FTDI’s Chinese parent company to follow a set procedure and timeline to complete the sale. The move highlights the UK’s efforts to protect sensitive technology sectors and its vigilance over foreign investments that may impact national security.
Increasingly, governments worldwide are scrutinising tech-related investments, especially in semiconductor industries, due to the strategic importance of chip technologies in national defence, infrastructure, and critical sectors.
A Chinese state-sponsored hacking group, Volt Typhoon, reportedly breached Singapore Telecommunications (SingTel) in June as part of a broader cyber campaign targeting telecom companies and critical infrastructure globally.
SingTel confirmed that malware was detected during the breach but assured there was no data exfiltrated or service disruption. The company took immediate action, reporting the incident to authorities, though it could not confirm if the breach was the same event mentioned in media reports.
Chinese officials have denied involvement in the attack, with a spokesperson asserting that China opposes all forms of cyberattacks. Volt Typhoon, previously linked to cyberattacks on critical US infrastructure, is believed to have used this incident as a test for potential future attacks on US telecom firms. The breach highlights the growing concerns over Chinese cyber activities targeting global critical infrastructure.
SpaceX, the aerospace company founded by Elon Musk, is urging its Taiwanese suppliers to relocate manufacturing operations off the island due to rising geopolitical tensions between China and Taiwan. This shift, aimed at reducing risk amid China’s increased military drills around Taiwan, has led some suppliers to transfer parts of their production to countries such as Vietnam and Thailand. Notable Taiwanese companies, including Chin-Poon Industrial and Wistron NeWeb Corporation (WNC), confirmed that SpaceX requested they move production, citing geopolitical concerns.
In response, WNC has already started producing network equipment for SpaceX’s Starlink project in Vietnam, with plans to double its workforce there. Similarly, Universal Microwave Technology has expanded in Southeast Asia, investing in new factories in Vietnam and Thailand, while Shenmao Technology is establishing a $5 million unit in Vietnam. These shifts align with Taiwanese tech companies’ broader efforts to diversify their operations outside Taiwan, aiming to insulate their supply chains from potential disruptions.
SpaceX’s approach underscores Musk’s complicated relationship with Taiwan, heightened after his comments last year calling Taiwan an “integral part” of China, which sparked backlash from the Taiwanese government. The company’s interest in building a manufacturing hub in Vietnam reflects an increasing trend of high-tech industries seeking stability amid geopolitical tensions, with Southeast Asia emerging as a crucial alternative for production.
The US Commerce Department has fined GlobalFoundries $500,000 for exporting semiconductor chips to SJ Semiconductor, an affiliate of China’s blacklisted chipmaker SMIC, without proper authorisation. GlobalFoundries, based in New York and one of the world’s largest contract chipmakers, reportedly made 74 shipments valued at $17.1M to the Chinese firm without obtaining the required export license. SJ Semiconductor and its parent, SMIC, were placed on the US trade restriction list in 2020 due to SMIC’s alleged links to China’s military.
GlobalFoundries disclosed the unintentional violation, attributing the exports to a data-entry error that occurred before the Chinese firms were listed. The company emphasised its commitment to strict compliance practices, a sentiment echoed by Assistant Secretary for Export Enforcement Matthew Axelrod, who urged American companies to be vigilant in transactions with Chinese entities.
This fine comes amid increased scrutiny of US export policy and enforcement, particularly as Washington works to prevent American technology from enhancing China’s military capabilities. GlobalFoundries is also in line to receive $1.5B in government support to expand semiconductor manufacturing in the United States, part of the Biden administration’s broader push to boost domestic chip production.
Huawei has announced that its latest operating system, HarmonyOS NEXT, will incorporate China’s central bank digital currency, the digital yuan. Officially launched on 22 October 2023, HarmonyOS NEXT will streamline digital yuan access for Huawei’s extensive user base, estimated at nearly 1 billion people. This marks the first in-house operating system developed entirely by Huawei, positioning it as the world’s third most popular operating system after Android and iOS.
With the digital yuan built directly into the operating system, users can access the currency without needing a separate application, simplifying its use. Huawei has also announced improvements in digital wallet management and enhanced interoperability with other financial applications, making the central bank’s digital currency more accessible and practical. Plans to expand the digital yuan’s reach across IoT devices and smart chips signal further integration across a range of technologies.
This integration comes at a time when China’s digital yuan is gaining momentum domestically and internationally. Recently, the International Air Transport Association (IATA) included the digital yuan as the first digital currency it will accept, citing China’s leading position in digital currency adoption. Meanwhile, China is preparing to update its Anti-Money Laundering laws to address risks associated with virtual assets, underscoring the country’s evolving approach to digital finance.
China’s People’s Liberation Army (PLA) has adapted Meta’s open-source AI model, Llama, to create a military-focused tool named ChatBIT. Developed by researchers from PLA-linked institutions, including the Academy of Military Science, ChatBIT leverages an earlier version of Llama, fine-tuned for military decision-making and intelligence processing tasks. The tool reportedly performs better than some alternative AI models, though it falls short of OpenAI’s ChatGPT-4.
Meta, which supports open innovation, has restrictions against military uses of its models. However, the open-source nature of Llama limits Meta’s ability to prevent unauthorised adaptations, such as ChatBIT. In response, Meta affirmed its commitment to ethical AI use and noted the need for US innovation to stay competitive as China intensifies its AI research investments.
China’s approach reflects a broader trend, as its institutions reportedly employ Western AI technologies for areas like airborne warfare and domestic security. With increasing US scrutiny over the national security implications of open-source AI, the Biden administration has moved to regulate AI’s development, balancing its potential benefits with growing risks of misuse.
