U.S. export controls intended to weaken Huawei have instead reshaped the Chinese company into a more resilient and self-reliant technology power.
A new analysis by the Information Technology and Innovation Foundation (ITIF) shows that sanctions imposed since 2018 reduced American firms’ global competitiveness while strengthening Huawei’s position across multiple markets.
The restrictions targeted Huawei over cybersecurity and trade concerns, aiming to limit its access to U.S. hardware, software, and design tools. Those measures, which expanded under two administrations, blocked the company from using Google services, advanced chips, and U.S.-licensed technologies. Yet the outcome diverged sharply from Washington’s intent. Huawei now leads the global telecom equipment market with about 34 percent share, up from 32 percent in 2018, and operates with minimal reliance on American inputs.
Huawei anticipated these actions years earlier. Beginning in 2012, the company prepared what it called “spare tires,” internal programs designed to replace imported technologies if restrictions occurred. By 2019, when the United States placed the firm on the Entity List, Huawei had already stockpiled key components, strengthened ties with domestic suppliers, and accelerated research funding. Between 2013 and 2024, the company’s research and development spending more than tripled, reaching levels above most Western peers. R&D intensity (spending as a share of revenue) averaged around 20 percent, second only to Intel among major tech companies.
That investment produced tangible independence. Huawei introduced its HarmonyOS platform in 2019, now running on more than a billion devices spanning smartphones, tablets, and laptops. The company’s HiSilicon unit developed advanced chipsets and replaced over 13,000 components once sourced from the United States. Its new Ascend processors now compete with Nvidia’s constrained H-series models inside China. Huawei’s expansion also extends into cloud computing, energy systems, and automotive technologies, with smart driving software already in hundreds of thousands of vehicles.
ITIF’s study finds the financial consequences for U.S. suppliers significant. American firms lost at least $33 billion in sales between 2021 and 2024 due to canceled contracts and export bans. Companies such as Intel, Qualcomm, Broadcom, and Teradyne were among those most affected. Teradyne’s share in semiconductor testing tools fell as Huawei turned to Japanese vendor Advantest, which gained from the absence of U.S. competition. Reduced sales have also limited research budgets across the U.S. semiconductor ecosystem, narrowing the long-term innovation gap Washington had sought to preserve.
The sanctions further invited retaliation. Chinese state-owned firms shifted procurement away from U.S. hardware and software, while Beijing instructed government offices to phase out foreign technologies. Local programs in cities such as Shenzhen now promote HarmonyOS adoption in public services, deepening domestic reliance on Huawei’s ecosystem and accelerating the move away from American products.
ITIF contrasts the current rivalry with the U.S.–Japan semiconductor tensions of the 1980s, when joint actions and industrial cooperation helped restore American leadership. Today’s unilateral controls, the foundation argues, work less effectively against a rival that possesses comparable technological capacity and direct state backing. Without coordination among allies, restrictions simply reallocate market share from American firms to foreign competitors.
The report concludes that the U.S. approach relied on outdated assumptions about its ability to dominate high-tech sectors through export limits alone. Huawei’s survival and renewed growth highlight that such measures can undermine the very companies they aim to protect. Rather than constraining innovation, the sanctions encouraged China’s leading technology manufacturer to build an independent industrial base that now competes across nearly every segment once dependent on Western suppliers.
Note: This post was edited/created using GenAI tools.
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A new analysis by the Information Technology and Innovation Foundation (ITIF) shows that sanctions imposed since 2018 reduced American firms’ global competitiveness while strengthening Huawei’s position across multiple markets.
The restrictions targeted Huawei over cybersecurity and trade concerns, aiming to limit its access to U.S. hardware, software, and design tools. Those measures, which expanded under two administrations, blocked the company from using Google services, advanced chips, and U.S.-licensed technologies. Yet the outcome diverged sharply from Washington’s intent. Huawei now leads the global telecom equipment market with about 34 percent share, up from 32 percent in 2018, and operates with minimal reliance on American inputs.
Huawei anticipated these actions years earlier. Beginning in 2012, the company prepared what it called “spare tires,” internal programs designed to replace imported technologies if restrictions occurred. By 2019, when the United States placed the firm on the Entity List, Huawei had already stockpiled key components, strengthened ties with domestic suppliers, and accelerated research funding. Between 2013 and 2024, the company’s research and development spending more than tripled, reaching levels above most Western peers. R&D intensity (spending as a share of revenue) averaged around 20 percent, second only to Intel among major tech companies.
That investment produced tangible independence. Huawei introduced its HarmonyOS platform in 2019, now running on more than a billion devices spanning smartphones, tablets, and laptops. The company’s HiSilicon unit developed advanced chipsets and replaced over 13,000 components once sourced from the United States. Its new Ascend processors now compete with Nvidia’s constrained H-series models inside China. Huawei’s expansion also extends into cloud computing, energy systems, and automotive technologies, with smart driving software already in hundreds of thousands of vehicles.
ITIF’s study finds the financial consequences for U.S. suppliers significant. American firms lost at least $33 billion in sales between 2021 and 2024 due to canceled contracts and export bans. Companies such as Intel, Qualcomm, Broadcom, and Teradyne were among those most affected. Teradyne’s share in semiconductor testing tools fell as Huawei turned to Japanese vendor Advantest, which gained from the absence of U.S. competition. Reduced sales have also limited research budgets across the U.S. semiconductor ecosystem, narrowing the long-term innovation gap Washington had sought to preserve.
The sanctions further invited retaliation. Chinese state-owned firms shifted procurement away from U.S. hardware and software, while Beijing instructed government offices to phase out foreign technologies. Local programs in cities such as Shenzhen now promote HarmonyOS adoption in public services, deepening domestic reliance on Huawei’s ecosystem and accelerating the move away from American products.
ITIF contrasts the current rivalry with the U.S.–Japan semiconductor tensions of the 1980s, when joint actions and industrial cooperation helped restore American leadership. Today’s unilateral controls, the foundation argues, work less effectively against a rival that possesses comparable technological capacity and direct state backing. Without coordination among allies, restrictions simply reallocate market share from American firms to foreign competitors.
The report concludes that the U.S. approach relied on outdated assumptions about its ability to dominate high-tech sectors through export limits alone. Huawei’s survival and renewed growth highlight that such measures can undermine the very companies they aim to protect. Rather than constraining innovation, the sanctions encouraged China’s leading technology manufacturer to build an independent industrial base that now competes across nearly every segment once dependent on Western suppliers.
Note: This post was edited/created using GenAI tools.
Read next: Microsoft Brings Copilot App Builder to Microsoft 365 Business Users
If only there is no trade war and sanctions,but cooperation,then both nations will be much more prosperous and the whole world will benefit. Hope that peace will prevail.
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