According to Bloomberg, leading US technology firms, from chip makers to Google, have just frozen supplying important software and components to Huawei Technologies, complying with executive orders from US President Donald Trump. This poses a big risk to technology firms as China’s pride.
Specifically, chip makers including Intel, Xilinx, Broadcom and Qualcomm told employees that it did not supply Huawei until the next announcement. Google of Alphabet cut the supply of hardware and some software services for Huawei.
Impact on 5G world
The move from the US business community has been predicted before and is expected to cause many obstacles for the world’s largest network equipment supplier and the world’s largest smartphone company. Last week, the administration of US President Donald Trump put Huawei on the blacklist, accusing the company of supporting Beijing foreign spies. Washington threatened to cut Huawei from the software and semiconductors it needed to produce products.
Blocking Huawei from critical supply may disrupt the business of many US names, such as chip maker Micron Technology. In addition, the 5G wireless network deployment is delayed worldwide, including in China. This fact can hurt many US firms that are growing depending on the world’s second largest economy.
If fully implemented, Washington’s move could have a spreading effect on the world semiconductor industry as well. Intel is the main server chip supplier for Huawei, Qualcomm supplies processors, modems for smartphones, Xilinx sells programming chips used in the network, and Broadcom is a chip vendor, an important component. Other in network machinery.
"Huawei relies heavily on US semiconductors and may face serious difficulties without the supply of US components," said Ryan Koontz, an analyst at Rosenblatt Securities. The ban from the US may cause China to delay the deployment of the 5G network until it is lifted. The ban also affects many global component suppliers.
This information makes it difficult for Asian technology supply chains to meet the financial market today 20.5. For example, Sunny Optical Technology Group is once again the worst performer in Hong Kong’s Hang Seng index, while Luxshare Precision Industry shares fell 9.8% on the Shenzhen floor.
Declared technology, trade?
Huawei practically stores enough chips and other important components to maintain its own business for at least three months. The company prepares for a bad situation from late 2018 by storing parts and designing its own chip. Huawei executives say that the business is a bargaining chip in US trade negotiations - China is continuing, believing that it can buy US components once the two sides reach a trade agreement.
The move from the US is likely to pull high trade tension, Washington technology - Beijing, raising fears that Mr. Trump’s purpose is to curb China, dragging the cold war between the two economies. The world’s largest economy. In addition to disputes on trade schools, the United States also put pressure on its allies to abandon their use of Huawei in the future 5G network.
“In the most extreme scenario, the failure of Huawei’s telecommunications network equipment will cause China to go back many years, even seen by China as a war move. Such failure can have a big impact on the world telecommunications market, ”said Koontz.
The pressure from the United States today struck directly into Huawei’s fast-growing mobile device division. Google said Huawei will only be able to access the public version of its Android mobile operating system. This is the most popular smartphone software in the world. Huawei will no longer be able to provide proprietary services such as Maps and Gmail. This factor will significantly reduce Huawei smartphone sales outside China.
Huawei is currently the second largest smartphone brand in the world, after Samsung Electronics and before Apple. Prior to the information released today, Huawei is one of the few global hardware partners to receive early access to Android software and features from Google.
