“We expect that our business will inevitably be affected,” Huawei spoke out about more stringent sanctions, barring any international company that trades with the US from producing chips for the Chinese telecom. The amendments made by the US Department of Commerce will have an adverse effect on Huawei’s business, and maybe the whole industry.
Last week, the US announced a new set of regulations specifically targeted at Huawei, the second-largest smartphone producer in the world. These regulations would ban Huawei from using US software and hardware in certain strategic semiconductor processes.
Who will be affected?
This not only affects companies based in the US, but also any company in the world who makes use of US technology. This includes the Taiwanese Semiconductor Manufacturing Co. who has reportedly already stopped taking orders from Huawei.
The Taiwanese Semiconductor Manufacturing Co. is the world’s largest contract semiconductor producer, and more specifically, it makes many of Huawei’s high-end HiSilicon processors.
“In its relentless pursuit to tighten its stranglehold on our company, the US government has decided to proceed and completely ignore the concerns of many companies and industry associations,” Huawei said in an official statement in its annual summit keynote.
“This decision was arbitrary and pernicious, and threatens to undermine the entire industry worldwide. This new rule will impact the expansion, maintenance, and continuous operations of networks worth hundreds of billions of dollars that we have rolled out in more than 170 countries,” it continued.
What about its future?
We must understand that Huawei’s technology spans further than just smartphones and tablets. The company’s networking equipment and cellular connectivity tech span far and wide across the globe. Limiting it in its endeavours will have far more implications for normal daily users than we know.
This move by the US government means that Huawei would have to shift major production lines to other manufacturers, and in most cases to other countries. The company has been working to move most of its production to local manufacturers in China, but the case of the semiconductors remains a big obstacle.
“Survival is the keyword for us at present,” said Huawei’s rotating chairman Guo Ping at the summit. And that’s just what Huawei would need to do.
This trade war is becoming one that will have more effects on the world of technology that we’d think. It’s a clear power struggle between two major tech producers in the world, and with the US’s economic prowess, it’s gaining momentum in turning producers outside of the US against Huawei too.
It’s a sad reality that Huawei will face some harsh battles ahead. It has made it clear that it’s pushing out great products while the US is clearly against them. The new trade regulations will definitely affect future production and costs of upcoming products. Which isn’t good for anyone not paying in US dollars…
Sauce: The Verge