Is the US shooting itself in the foot by banning Huawei?

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tidalwave

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Their FAB is up and running and SMIC is a Chinese company they are not following Trump order Thye might have problem sourcing spare part for their fab if their supplier refused to service them due to embargo But as I said before they must stock up spare parts.

Worst come worst they will reverse engineer whatever part that they need China has a lot of experience facing technical embargo and everytime they prevail
It is not like China has no equipment supplier They do have in every category they are not the best but they do have So in the long run they will replace all the imported equipment with domestic one
Even the 7nm lithograph will be soon available

It is too late now to browbeat China into submission 10 years ago yeah that is possible

What you referring to is its cellphone business. I can see them continue operation.

And Faithlock is correct Huawei currently has no replacement for FPGA and optical components for its telecom equipment!

It's telecom equipment department will shutdown, layoff and hopefully come up with domestic solution in few years! That division would NOT be business as usual.
 

localizer

Colonel
Registered Member
Small price to pay to wake people up.

I mean the US better have some long term plan because things like this this aren't going to do dip long term.
 
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Well actually on Wall Street, at least in the big IBanks, people are extremely worried about Trump's latest string of escalatory moves and remarks. The stock indexes doing okay does not mean it's BAU on the street.
 

Icmer

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The latest:

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Exclusive: Huawei stockpiled 12 months of parts ahead of US ban
Fears of collateral damage hang over Chinese tech group's Asian supply chain

CHENG TING-FANG, LAULY LI and COCO LIU, Nikkei staff writersMAY 17, 2019 00:54 JST

TAIPEI/HONG KONG -- Huawei Technologies told global suppliers six months ago it wanted to build up a year of crucial components to prepare for trade war uncertainties, even as it moved to secure new sources and become more self reliant, sources familiar with the plans told the Nikkei Asian Review.

Meanwhile, concerns are mounting in Huawei's Asian tech supply chain about collateral damage from the U.S. government's move to potentially block American and even foreign companies from doing business with the world's leading telecom equipment maker, whose global procurement totals around $67 billion a year. Shares in companies whose fortunes depend in part on Huawei business sold off Thursday.

The reaction followed a statement Wednesday by the U.S. Department of Commerce that it was placing the company on a export control list. The listing, once in effect, means that all of Huawei's American suppliers will require U.S. government approval to sell to the Chinese company.


The lack of detail in the statement creates uncertainty for Asian manufacturers. Many important Huawei suppliers in the region including
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-- the world's largest contract chipmaker -- have held internal meetings to assess the implications, multiple sources told Nikkei.

Multiple sources said that Huawei's preparations for a worst-case scenario -- a U.S. ban on business with key suppliers -- started more than six months ago and were not limited to chips but spanned a wide range of electronics, including passive components and optical parts. For some components that are subject to higher risks of export controls, Huawei has stockpiled six months' to more than a year's worth of supply, while holding at least three months' worth of less crucial ones, the sources said.

The world's second-largest smartphone vendor also started at the beginning of this year to certify more suppliers of chips, optical components, camera-related technologies and other parts in places outside the U.S., people familiar with the matter said.

"Previously, Huawei would only use the world's top one or two suppliers for electronic components, but this year it assigned the team to extend the reach to three to four suppliers for each component," said a source with direct knowledge of the plan. "The most important goal is to avoid the worst case that Huawei's products in smartphone, servers, and telecom equipment could not be delivered because of a U.S. ban or other trade war uncertainties."
The Chinese company also set a goal of developing its own versions of semiconductor devices, including high-end radio frequency and optical chips, for which it still relies heavily on U.S. vendors in two and a half years.
Huawei's U.S. suppliers include Qualcomm, a crucial source of mobile chips and intellectual property, as well as memory chip supplier Micron Technology, processor maker Intel, radio frequency chip suppliers Skyworks, Analog Devices and Qorvo, and optical parts provider Finisar. The listing will take effect when published in the Federal Register.

The U.S. ranked the largest region in a list of 92 major suppliers issued by Huawei at the end of 2018, accounting for more than 30 of the companies. However, given the lack of detail from the Department of Commerce, it is unclear whether American technologies indirectly supplied to Huawei via suppliers outside the U.S. are subject to the licensing requirement.

Asian suppliers including Sony, TSMC, liquid crystal display maker
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, South Korean memory chip maker
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and its Taiwanese peer
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all use equipment or materials from the U.S. to manufacture products.

According to a Nikkei analysis of reports from Goldman Sachs and other sources, about 60% of Huawei's top 70 suppliers are based in Asia.

"Washington's decision to place Huawei on the Entity List causes very big uncertainty for the tech supply chains. At the moment, no suppliers know exactly how to evaluate the latest development," Jonah Cheng, chief investment officer at J&J Investment and a former veteran tech analyst at UBS, told the Nikkei Asian Review.
 

Max Demian

Junior Member
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Their FAB is up and running and SMIC is a Chinese company they are not following Trump order Thye might have problem sourcing spare part for their fab if their supplier refused to service them due to embargo But as I said before they must stock up spare parts.

Worst come worst they will reverse engineer whatever part that they need China has a lot of experience facing technical embargo and everytime they prevail
It is not like China has no equipment supplier They do have in every category they are not the best but they do have So in the long run they will replace all the imported equipment with domestic one
Even the 7nm lithograph will be soon available

It is too late now to browbeat China into submission 10 years ago yeah that is possible

You are not being realistic. The tools in semi foundries require continuous maintenance and cannot be reasonably stockpiled unless you want to pay double the price for each piece of equipment. But even that won't help you. When something breaks down (which happens more often than you would think) you depend on the supplier to diagnose the problem and decide what needs to be fixed/replaced. Cut of from their key suppliers, fabs would come to a halt within a month or two.

Everything else is just speculation.
 

tidalwave

Senior Member
Registered Member
Huawei is sucks too , just not as bad in terms of strategic thinking.
It develops chips to lower its cost mainly . it never anticipate trade war.

It still a liability in terms of enabling US to hold it hostage to the detriment of the country.
 

Faithlock

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By the way, for those who think China didn't try to create electronic industry supply chain before are mistaken.

I don't blame them. They might get that impression from the current Chinese administration.

But before the current Xi administration, previous administrations had being putting significant resources in building a semiconductor fab industry. Sometimes, even to the point of having negative returns.

Can you get more significance when the son of China's president (and Party chairman) try to start up a semiconductor fab?

That is right. The son of President Jiang Zemin, Jiang Mianheng started the Grace Semiconductor in 2000. He started the fab with Winston Wang of Taiwan. Winston Wang is the son of Taiwan's Formosa plastic king. Winston Wang is also politically closer to DPP (the pro- Taiwan independence party).

Also in 2000, SMIC was started by another Taiwanese, Richard Chang. Richard Chang is regarded as the father of China's semiconductor industry. Richard is a devout Christian. Part of the reason of him wanting to go to China is to spread the word of gospel.

He brought hundreds of Taiwanese engineers to start the SMIC. He built special school where the curriculum is based on Taiwan school system. His company has school that uses textbooks that says communists steal China from the Nationalist. Japanese had made significant contribution to the economy of Taiwan, how Taiwan is being bullied by China, etc...

All of these are approved by the Chinese government.

You think Jiang Zemin's administration will take all those crap if he is not eager to create a semiconductor industry.
 

Hendrik_2000

Lieutenant General
You are not being realistic. The tools in semi foundries require continuous maintenance and cannot be reasonably stockpiled unless you want to pay double the price for each piece of equipment. But even that won't help you. When something breaks down (which happens more often than you would think) you depend on the supplier to diagnose the problem and decide what needs to be fixed/replaced. Cut of from their key suppliers, fabs would come to a halt within a month or two.

Everything else is just speculation.

you think they don't have local service man or diagnostic tool to service those machinery Thye certainly have. It is the part that they don't have. In case of survival they will tose out the patent right and do reverse engineering of those part
 

Icmer

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The latest:

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Huawei's worst-case scenario moved closer to reality when the U.S. Commerce Department said Wednesday it would add Huawei and 70 affiliates to its so-called Entity List, which requires U.S. companies and foreign entities to obtain licenses if their businesses relate to "the sale or transfer of American technology to a company or person" on the list. "The license may be denied," the department said.

Jefferies Equity Research said in its latest report that the U.S. government is not expected to approve such licenses.
Asian suppliers including Sony, TSMC, liquid crystal display maker
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, South Korean memory chip maker
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and its Taiwanese peer
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all use equipment or materials from the U.S. to manufacture products.
The lack of detail in the statement creates uncertainty for Asian manufacturers. Many important Huawei suppliers in the region including
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and
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-- the world's largest contract chipmaker -- have held internal meetings to assess the implications, multiple sources told Nikkei.

This part is interesting. How will the US legally enforce preventing foreign companies from supplying components to Huawei? From the rest of the reporting, Huawei's Asian suppliers are all rather perplexed at this provision and currently making risk assessments. The US's exercise of long-arm jurisdiction is again evident, and could potentially include prosecuting offending companies like with Iran. In that case we saw the EU pass a blocking statute to nullify the Iran sanctions for EU companies.

For example, if Sony continues to work with Huawei to supply camera sensors for its flagship smartphones, the US might fine/prosecute Sony just as it did with ZTE. Same goes for TSMC, etc etc
 
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