The war between Trump’s management and Chinese-generation company Huawei has intensified significantly this week, and the implications have not yet been fully assessed, this can also be a game changer. It took Trump’s team about 18 months to locate his brand, to locate a knot tight enough that Huawei could not be released, but that purpose would possibly have been accomplished.
Last Monday (August 17), U.S. Commerce Secretary Wilbur Ross ambushed Huawei by saying that any company selling chipsets to Huawei, designed or manufactured with any American technology, will first have to download a license. These are the chips that drive Huawei’s flagship products: your 5G device and, more specifically, your smartphones.
The new regulations increase the restriction for Huawei to use its own traditional chipsets, designed or manufactured with U.S. technology. The restriction was not announced until May, on the first anniversary of Huawei’s blacklist. Whether or not this last move was on the drawing table at the time, it has now removed Huawei’s Plan B: resort to popular third-party chipsets. Trump’s team noted that drastic has an effect on Huawei of initial sanctions on silicon, and has now pointed to that same injury with a much heavier weapon.
The timing of the last American motion is also remarkable. Last weekend’s holders had covered the expiration of the so-called General Transitional License (TGL), the mechanism through which (among other things) Huawei phones delivered with Google can simply continue to obtain updates from the US company, is prohibited. license new smartphones. Huawei is confident that phones delivered with Google will continue to work normally; Google did not comment.
Before the United States opposed Huawei’s silicon source chain, Google had been the largest management coup for Huawei’s customers’ business – the company’s fastest-growing and most successful component. Huawei continued to launch new flagship products after the blacklist: the up-and-coming Mate 30, P40 and Mate 40 sold well in China.
Driven through those sales in China, as well as through multimillion-dollar contracts of 5G gadgets also guaranteed at home, Huawei has continued to accumulate revenue and profits, boosting its studies and its progression machine. This has frustrated the United States, which has continued to make a crusade, effectively, for countries around the world to evicted Huawei from 5G plans. The client sector, however, seemed foolproof.
Well, not anymore. Just two weeks ago, Huawei’s chief customer, Richard Yu, demonstrated that this fall’s Mate 40 would be the newest flagship product that will feature one of the company’s traditional Kirin chipsets. Until the new US hammer blow, it was clear that the company would simply upgrade the Kirin chipset with a third-party option: MediaTek, for example. That doesn’t turn out to be an option anymore.
Immediately after these new sanctions, it soon became clear how serious this could be. An opinion piece through Bloomberg described the resolution as “more than an incremental measure … It threatens to kill the company, causing retaliation by Beijing.”
This was picked up in the Financial Times, with an industry analyst claiming that “the U.S. government. He has issued an opposite death sentence to Huawei: he has probably ended up as a manufacturer of 5G network devices and smartphones once his stock runs out early next While some other analyst told the newspaper that “the US government absolutely blocks Huawei and leaves him with no alternative,” the analyst described the loss of access to MediaTek over the strike opposed to Huawei , jeopardizing your cellular business.
MediaTek has shown that it will comply with the new U.S. restrictions. As applied: “We have followed the laws of foreign industry,” the company said in a statement. “We will download the latest regulations and conduct a legal investigation to ensure compliance with applicable rules.
In May, the key question was what inventory of chips Huawei had built to protect against new US sanctions. Consensus is sufficient to last between 12 and 24 months. But on the front of the smartphone, we now know that Huawei only has enough Kirin chips for the release of the Mate 40, maybe not even enough for that. By taking third-party chips from the mix, it makes sense to assume that the company can take over at least until early next year. On the side of 5G devices, maybe much more than that.
For 18 months, Huawei injected messages to the market about its choice of HMS to Google software and lost. As the company’s customer leader in the UK told me last week, just before the most recent US sanctions, it is essential for HMS to work. If you can’t convince users who are hooked to Google to change, it won’t be able to rebuild. Again, all of those plans concerned a Huawei hardware base that could compete with Apple and Samsung, as well as Xiaomi, Vivo and Oppo, which are now pending, undermined by the new US action.
Huawei’s entire customer strategy revolves around their smartphones, cementing their forays into smart TVs, PCs, cars, portable devices and tablets. If you can’t stay with your smartphone users, you won’t be able to sell the rest of your strategy. And it is the customer’s business that currently drives Huawei’s overall success. The company cannot in its current form if its customers’ activities are seriously affected. The layoffs would already be planned, though a corporate informant reportedly told a Chinese-generation site on Friday: “Last night we had another meeting until midnight. The boss’s attitude is to move on and die rather than back down.”
Unless the United States chooses Biden to then rescind those latest sanctions, or China reviews its domestic silicon industry to update the U.S. generation or impose violations of new state-sponsored regulations, there is no immediate “status quo.” option for Huawei this time. We can probably be waiting for a company reform next week, once you’ve evaluated the options. However, there are no simple options. As the FT summed up succinctly on August 21, “industry experts say it’s hard to believe how the company can continue to manage its operations in its current form under Washington’s supposedly stringent sanctions.”
A “death sentence” for Huawei’s client corporations also poses serious disruptions to the large number of commercial and telecommunications customers around the world who use their business and 5G generation. If U.S. stock It has the effect of what it wants, governments and networks around the world will have to deal with the consequences of a sudden surprise in the source chain of the 5G device by the withdrawal of Huawei.
In March, when Huawei announced its 2019 results, he publicly warned that if the United States took action like this, “the Chinese government will not only see Huawei being massacred on the cutting board.” We still don’t know what China will or won’t do beyond the threats and rhetoric of state media: it has much to lose from the reciprocal action opposed to U.S. corporations that get parts and use its production base while seeking to recover from an effect on the coronavirus.
When Richard Yu proved that the Mate 40 would be Huawei’s newest phone to bring a traditional Kirin chip, I commented that the phone can also be a collectible item, the last of its kind. At this time, it turns out that the Mate 40 can also be an even more vital step in the “end of an era”. In the volatile global world of customer products, Huawei would possibly want a political or technical miracle this time.
I am the founder/CEO of Digital Barriers, which develops complex surveillance responses for defense, national security and combating terrorism. I write about the intersection
I am the founder/CEO of Digital Barriers, which develops complex surveillance responses for defense, national security and combating terrorism. I write about the intersection of geopolitics and cybersecurity, and analyze security and surveillance stories. Contact me at [email protected].