China's Huawei Technologies, one of the top networking companies globally, must face criminal charges in the U.S., according to U.S. District Judge Ann Donnelly. On Tuesday, Judge Donnelly rejected Huawei's request to dismiss the 16-count federal indictment against the company. In her 52-page decision, the judge said that Huawei's arguments in its filing asking her to dismiss the case were premature.
Huawei is accused of stealing technology, engaging in racketeering, wire and bank fraud, and committing other illegal acts. For example, the U.S. says that Huawei and some of its subsidiaries planned to illegally obtain U.S. trade secrets. It is also accused of installing surveillance equipment that allowed Iran to spy on anti-government protesters in 2009. Huawei also violated U.S. sanctions by doing business with North Korea.
The U.S. has long considered Huawei to be a national security threat and in 2019 it was placed on the Entity List by the Department of Commerce's Bureau of Industry and Security (BIS). As a result, Huawei cannot obtain U.S.-origin parts and components without the supplier obtaining a special license from the U.S. Commerce Department.
Exactly one year later, the Commerce Department tightened the noose around Huawei by using the Foreign-Produced Direct Product Rule (FPDPR). As a result, any foundry using American technology to build chips is blocked from shipping said chips to Huawei without a license. Huawei has managed to get around these sanctions by developing its own HarmonyOS operating system. Replacing the chips it could no longer receive was a harder problem to solve.
After using all of its remaining Kirin 9000 inventory (this was the Huawei-designed 5nm chip that was the first to support 5G with an integrated 5G modem), Huawei was able to obtain Snapdragon application processors for its flagship phones. However, the U.S. issued the necessary licenses to Qualcomm because it tweaked the chips so they couldn't work with 5G networks.
While the inability of Huawei and China's SMIC foundry to obtain the necessary lithography machines prevent it from closing the gap with chips designed by Apple, Qualcomm, MediaTek and others, Huawei stunned the wireless world in 2023 by using a 7nm chip built by SMIC with 5G support to power the Mate 60 series. This allowed the manufacturer to sell 5G phones once again.
China has accused the U.S. of "economic bullying" and using national security to oppress Chinese companies. In its filing requesting a dismissal, Huawei says that the U.S. allegations are too vague.