Business

Non-Stop Attacks From US Govt. Puts Huawei In A Difficult Situation

Donald Trump Huawei

Huawei says it is in survival mode in the wake of attacks from the United States that threaten to restrict the Chinese company’s access to key technology.

“Huawei is in a difficult situation these days. Nonstop aggression from the US government has put us under significant pressure,” Huawei’s rotating chief executive Guo Ping said at a press conference held on Wednesday. “Right now, survival is the goal,” he explained.

Washington has increased pressure on Huawei, rolling out sanctions in May and Aug. that tightens the restrictions on the company’s access to the leading edge computer chips required to manufacture smartphones, 5G networking gear, and other products.

Semiconductor companies that rely on American software and technology to design and manufacture chips are no longer able to sell to Huawei without first qualifying for a license provided by the US Commerce Department. US regulators claim it poses a national security risk, alleging that Beijing could use Huawei equipment to spy, but Huawei has relentlessly denied those allegations.

Analysts describe the latest US sanctions a “lethal blow” and a “death sentence” for Huawei. “The United States has been continuously attacking us and [the latest restriction] has posed great challenges to our operations,” Guo told reporters.

Some analyst claim Huawei has stockpiled enough semiconductors to last the company through at least the end of 2020. When asked how long supplies will last during a press conference, Guo explained, “we’re still evaluating more details.”

He went on to suggest that the company buys millions of chipsets for its smartphone business every year, and confirmed that the company received its last shipment of chips in mid-Sept. when the United States announced restrictions announced earlier this year went into effect.

Qualcomm, SK Hynix, and other major chipmakers applied for licenses to sell to Huawei, according to Chinese state broadcaster CGTN. Touted as China’s biggest chipmaker, SMIC released a statement saying it also has “submitted license applications covering several Huawei products” but didn’t divulge more details.

Some companies including Intel managed to get the approval. A spokesman for the US company said it has received a license from US authorities to continue supplying Huawei, but did not specify which products it was allowed to sell. Intel has supplied processors for Huawei laptops.

AMD also may have got the licenses to sell to Huawei. “Based on the licenses that we’ve been able to secure, we don’t expect to see a significant impact on our business at this time,” senior vice president of AMD Forrest Norrod said at a conference last week” citing recent US-China trade tensions.

Although Norrod did not specifically mention Huawei, Jefferies analyst Edison Lee has pointed out that the California-based chip company supplies Huawei with computer processing units for laptops.

The Trump administration has been encouraging countries around the world to stop using Huawei equipment from their 5G telecom networks. Several key countries avoided cutting off Huawei entirely, but that changed after US restrictions announced earlier this year, barring chip companies from making chips designed by Huawei affiliate HiSilicon.

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