The situation with the US trade war against China continues to evolve and become more and more alarming. Major U.S. corporations, from chip makers to Google, have suspended shipments of critical software and hardware components to Huawei in a stringent demand from the Trump administration, which is threatening to end its partnership with China's biggest tech company entirely.
Citing anonymous whistleblowers, Bloomberg reported that chip makers including Intel, Qualcomm, Xilinx and Broadcom have told their employees they are ending their partnership with Huawei pending further instructions from the government. Google, owned by Alphabet, has also stopped supplying hardware and some software services to the Chinese giant.
These moves were expected and meant to hurt the world's largest network equipment supplier and the world's second largest smartphone maker. On Friday, the Trump administration blacklisted Huawei, which it accused of aiding Beijing in espionage, and threatened to cut the company off from critical U.S. software and semiconductor products. Blocking the sale of critical Huawei components could also hurt the business of U.S. chip makers like Micron Technology and slow the rollout of advanced 5G wireless networks around the world, including in China. This, in turn, can already cause indirect damage to American companies, the growth of which is increasingly dependent on the second largest economy in the world.
If the plan to isolate Huawei is fully implemented, the Trump administration's actions will have repercussions throughout the global semiconductor industry. Intel is the main supplier of server chips for the Chinese company, Qualcomm ships processors and modems for many smartphones, Xilinx sells programmable chips used in network equipment, and Broadcom is a supplier of switching chips, another key component in some types of network equipment. Representatives of American manufacturing companies declined to comment.
Rosenblatt Securities analyst Ryan Koontz said Huawei is heavily dependent on U.S. semiconductor products and its business will be severely affected in the absence of key hardware supplies. China's rollout of 5G networks could be delayed until the ban is lifted, which would affect many of the world's component suppliers, he said.
To be sure, in the run-up to the ban, Huawei stocked up on enough chips and other vital components to keep its operations going for at least three months. The company began to prepare for such a development of events no later than mid-2018, accumulating components and investing in the development of its own analogues. But Huawei executives still believe that their company has become a bargaining chip in the ongoing US-China trade talks, and purchases from US suppliers will resume if a trade deal is reached.
The actions of American companies are likely to escalate tensions between Washington and Beijing: many fear that US President Donald Trump's desire to contain China will lead to a protracted cold war between the world's largest economies. In addition to the trade standoff that has been hurting global markets for months now, the US is pressuring its allies and adversaries alike to not use Huawei products to build the 5G networks that should be the backbone of the modern economy.
βThe worst-case scenario to undermine Huaweiβs telecommunications business would set China back many years and could even be viewed by the country as an act of military aggression against it,β Mr. Kunz wrote. βSuch a scenario would also have serious implications for the global telecommunications market.β
American moves are also aimed at cracking down on Huawei's rapidly growing mobile device division. The Chinese company will only be able to access the public version of Google's Android mobile operating system and will not be able to offer the search giant's apps and services, including Google Play, YouTube, Assistant, Gmail, Maps, and so on. This will seriously limit sales of Huawei smartphones abroad. Judging by the situation with the Crimea, Google could theoretically block the operation of its services on already sold devices.
Huawei, the world's largest smartphone maker after Samsung Electronics, has been one of the few Google hardware partners to get early access to the latest Android software and Google features. Outside of China, such connections are critical to the search giant, which uses them to spread its apps and bolster its advertising business. The Chinese company will still have access to the software and security updates that come with the open version of Android.
However, according to Google, cited by Reuters, owners of existing Huawei electronics using the services of the American search giant should not be affected. βWe comply with the requirements and analyze the consequences. For users of our services, we would like to inform you that Google Play and Google Play Protect will continue to function on existing Huawei devices,β a company spokesperson said, without providing further details. In other words, future Huawei smartphones may well lose all Google services and services.
The entry into force of the ban plunged shares of Asian technology suppliers on Monday. Anti-records were set by Sunny Optical Technology and Luxshare Precision Industry.
Source: 3dnews.ru