Huawei-Changan tie-up expands to include chips

Huawei-Changan tie-up expands to include chips


Reuters May 24, 2021

China’s Huawei Technologies is expanding its smart car partnership with state-owned Chongqing Changan Automobile Co Ltd to include the design and development of auto-use semiconductors, four sources with knowledge of the matter said.

The two companies, which unveiled their smart car tie-up in November, have been working together informally on chips for the last few months, two of the sources said. A third source said they might soon form a joint venture for chip development. Shares in Changan rocketed higher on the news, closing up 8.5% compared to a 4% decline earlier in the day.

Huawei has pivoted to electric vehicles after its global smartphone business was hammered by US sanctions. The previous Trump administration labelled the company a threat to the US national security – a charge it denies. In addition to the deal with Changan to develop smart cars under a joint as-yet-unnamed brand, Huawei is also planning EVs under its own marque and is in talks to take control of a small domestic automaker’s EV unit, sources have said.

Huawei’s new chip partnership with Changan would come amidst a global semiconductor shortage that has hit automakers particularly hard.

It would also represent a significant expansion for Huawei’s chip business after US sanctions meant it lost access to the underlying chip design software needed for more advanced chips used in smartphones.

The sources declined to be identified as they were not authorised to speak to media. Changan did not respond to a request to comment. Huawei said it defers to automakers in public announcements regarding their tie-ups. Battery maker CATL, which is also part of the smart car partnership, also did not respond to a request for comment.

 

 

Published in The Express Tribune, May 24th, 2021.

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