Archive for May 30th, 2019
Here are all the companies that have cut ties with Huawei, dealing the Chinese tech giant a crushing blow
- Major US companies like Google, Qualcomm, and Intel were quick to sever business ties with the company to comply with the order.
Note: All these public announcements are just words. China has the monopoly of 90% of the rare metals (earth dirt) that all these companies urgently need to continue their multinational adventure. China State media said it could cut exports of 17 metals used in everything from consumer electronics to military equipment, as a counter weapon in the escalating trade war. China produces more than 95% of the globe’s rare earth metals. And Huawei has been working for years on an Android alternative.
Since the US government blacklisted the Chinese tech giant Huawei, a slew of companies have cut ties with the firm.
Last week, President Donald Trump signed an executive order declaring a national emergency that allowed Huawei to be designated as a national security risk, leading the Department of Commerce to place the firm on an “entity list.” This means US firms have to seek government permission before doing business with Huawei.
Big US firms were quick to respond to the order, though Huawei subsequently received a three-month license to get its house in order before the blacklisting fully kicks in. It isn’t just American companies that are cutting ties, however.
Here is a rundown of the biggest firms that are severing business relations with Huawei.
Shortly after Huawei was blacklisted by the US government, Google CEO Sundar Pichai announced that it was revoking the company’s access to its Android service. Bloomberg reported that Google had cut off supply to hardware as well as software.
The news was a huge blow to Huawei, as all of its phones a run on Google’s Android operating system. It means millions of Huawei customers could lose access to security updates and suffer other disruption.
After the Department of Commerce granted Huawei a 90-day reprieve before the ban fully kicks in, Google said it had put its Android suspension on hold. But at the moment, this is simply delaying the inevitable.
Huawei has been working on building its own operating system as a “plan B” for years, and though little is known about it, an executive told CNBC it could be ready for China by this fall and for the rest of the world in the first or second quarter of 2020.
Key US chipmaking companies such as Qualcomm CEO Steven Mollenkopf were quick to act. Three days after Huawei was blacklisted, Bloomberg reported that Qualcomm had told its employees it wouldn’t be supplying Huawei until further notice.
Intel CEO Bob Swan was another big name on the list of American chipmakers to cut Huawei off, though according to Bloomberg, Huawei has stockpiled at least three months’ worth of chips and other components in anticipation of a ban.
Lumentum, the US maker of mobile-phone parts, also announced it had stopped shipping parts to Huawei, which it said made up 18% of its total revenue in its latest quarter.
The Japanese tech behemoth Panasonic president, Kazuhiro Tsuga on Thursday announced it had cut ties with Huawei. “We’ve stopped all business transactions with Huawei and its 68 group companies … that are subject to the US government ban,” a spokesman told The Guardian.
The UK chip designer Arm (Simon Segars, CEO) issued a memo to employees telling them to stop “all active contracts, support entitlements, and any pending engagements” with Huawei, the BBC reports. The memo said its designs contained “US-origin technology.”
Arm licenses its technology rather than manufacturing chips itself. The Economist’s Hal Hodson pointed out on Twitter that companies typically buy up licenses from Arm several years in advance, meaning it’s possible that Huawei has two to three years’ worth of licenses stored up.
The UK’s largest mobile carrier, Vodafone, on Wednesday announced it was dropping Huawei handsets from its 5G launch, which is due July 3.
“We are pausing pre-orders for the Huawei Mate 20 X (5G) in the UK,” a spokesman told The Guardian. “This is a temporary measure while uncertainty exists regarding new Huawei 5G devices. We will keep this situation under review.”
The British mobile carrier EE joined Vodafone in excluding Huawei from its 5G plans, which are due to launch May 30.
EE told The Guardian it took the decision to can Huawei’s 5G phones following Google’s withdrawal of Android.
Microsoft has yet to make an official statement on its relationship with Huawei, but Huawei’s MateBook laptops disappeared from Microsoft’s online store the weekend after Trump’s executive order.
Microsoft declined to comment when contacted by Business Insider.
Note 2: When China builds your nation’s internet. Across Africa, countries are being connected to the digital economy with help from China. But Beijing believes every nation should be able to create its own version of the internet, and its projects help governments gain more control over the flow of information—to the possible detriment of democracy. In a Quartz video (membership), Nikhil Sonnad travels around Zambia to show how China is helping it become both more connected and more authoritarian.
Note 3: China accused US secretary of state Mike Pompeo of “fabricating rumors” about the company’s alleged ties to government. Meanwhile, president Trump suggested the phonemaker could be part of a future trade deal with China, a week after blacklisting the company from US supply chains.
Note 4: The US temporarily eased restrictions on Huawei. The Chinese telecoms giant will be allowed to buy American-made goods in order to maintain its existing phone networks and handsets, but it is still barred from purchasing American wares to manufacture new products. Huawei founder Ren Zhengfei told Chinese state media that the US underestimates the company.