To address its own and country biggest weakness, Huawei must advance its chip manufacturing.

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phynex92

New Member
Registered Member
Guys, I really don't think the banning of Huawei is going to be a huge deal for China. The fact that the US is expending this much effort into sabotaging Huawei's operations tells you a lot about the tech prowess Huawei has. Even in the worst case scenario where Huawei is totally destroyed, the thousands of people that the company has trained in the past can be reabsorbed by other Chinese companies such as Oppo, Xiaomi, Tsinghua Unigroup and Lenovo. The US can ban a lot of things, but it can't ban ex-Huawei employees from going into other Chinese companies. After all it's the people that makes a company great, not the other way around. As a matter of fact, aside from the IT sector, the US has very little leverage on China's industries as a whole. A bad relationship with China also shuts out the Chinese market for a lot of American firms. Keep in mind that China is already the largest market for a significant amount of commodities in the world and this market is still growing at a much faster rate than that of the US. I think it is incredibly shortsighted of the American leadership to totally neglect the insane amount of potential that China has in the future and American companies will likely suffer the consequences down the road.
 

gelgoog

Brigadier
Registered Member
They even have cover. They can simply claim Apple is a national security threat due to alleged spying.

They're probably thinking the next Democratic president(Joe Biden) will be more dovish. If a presidency under Joe Biden continues this hawkish tone towards China, I'm pretty sure even Mcdonalds won't be safe in China.

I doubt it. I think the Chinese leadership has seen this moment coming in a long time. It is why Xi was given the wide powers he has in the first place.
 

tower9

New Member
Registered Member
They even have cover. They can simply claim Apple is a national security threat due to alleged spying.

They're probably thinking the next Democratic president(Joe Biden) will be more dovish. If a presidency under Joe Biden continues this hawkish tone towards China, I'm pretty sure even Mcdonalds won't be safe in China.

Biden won't win against Trump. It will be Hillary Part 2.

Bernie has a much better chance. But unfortunately, it seems like Biden is leading right now.
 

Hendrik_2000

Lieutenant General
According this Asia time article Huawei RE most of the chip that they import
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US ban won’t derail Huawei’s European 5G rollout
High-ranking European government officials say that Washington’s latest move does not threaten the Chinese telecoms giant

By ASIA TIMES STAFF
Two high-ranking European government officials told Asia Times in background discussions that a US ban on sales of electronic components to Huawei Technologies wouldn’t stop the Chinese telecom firm from rolling out 5G mobile networks in Europe.

Europe doesn’t really have a choice in the matter, the officials emphasized in background briefings, because the United States doesn’t offer a competing product, and Huawei’s competitors – Ericsson and Nokia – don’t have the capacity or the knowledge to replace the Chinese giant.

The two Scandinavian firms don’t offer serious competition to Huawei, but rather work in close cooperation with the much larger Chinese firm. Huawei’s research and development budget is roughly double that of Ericsson and Nokia combined, according to public sources.


So intertwined were the activities of Huawei, Ericsson and Nokia in European telecom infrastructure that it is impossible to ban the sale of parts to one of them without affecting the others, an official explained. The official, who oversees telecom policy for one of the Group of 10 economies, doubted that Washington’s action would have much impact.

German Chancellor Angela Merkel and Dutch Prime Minister Mark Rutte told reporters Thursday that they would not ban the Chinese firm, adding that policies were in place to safeguard their security. French President Macron told a technology conference Friday that France’s “perspective is not to block Huawei or any other company. France and Europe are pragmatic and realistic.” Macron stressed that France would balance security with access to good technology.

After the Trump Administration suspended US exports of handset chips to the smaller Chinese telecom firm ZTE in the spring of last year, Huawei undertook a crash program to produce its own advanced chips.
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exclusively in April that the Chinese firm had reached self-sufficiency as of December 2018.

Huawei’s Kirin chipset, designed by subsidiary HiSilicon and fabricated by Taiwan Semiconductor Manufacturing and other firms, effectively replaces the Qualcomm chips that power most high-end handsets.

A memo from the CEO of HiSilicon,
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, confirms that Huawei is independent in chip production, comparing the firm’s program to achieve self-sufficiency to the Chinese Communist Party’s Long March of 1934-1935.

Huawei imports several dozen electronic parts from American firms. Nikkei Asian Review and other media
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that Huawei has stockpiled a year’s inventory of critical components. Finding alternative sources or simply reverse engineering the products is a much less difficult challenge for Huawei than developing its own chipsets.


Google has suspended updates of its Android operating system for Huawei handsets,
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. Huawei has developed its own handset operating system as a backup, but the Google ban would restrict Huawei’s use of Google apps, including Gmail.

China may retaliate with a price war for advanced chips. Huawei announced a full portfolio of artificial intelligence-enabled chipsets under the Ascend brand, powering large data processors as well as handsets.

After seizing a dominant position in telecom equipment, Huawei now competes head-on with America’s best chip design firms, including Qualcomm and Nvidia, in the processor space. Industry experts speculate that China might retaliate against America’s export ban by drastically lowering the prices of its AI-enabled chips, pushing the American firms out of Asian and European markets that comprise the majority of their sales.

The US export ban might backfire, locking Asian and European buyers into China’s emerging chip technology. Huawei became the dominant player in the telecom equipment market by undercutting its competition, forcing competitors out of the market, and hiring their best talent.


Of Huawei’s 188,000 employees, 40,000 are foreign, many employed in twenty-one research centers that the Shenzhen firm supports around the world. If the Trump Administration fails to hinder Huawei’s 5G rollout, as European leaders have indicated it will, Huawei may also emerge as a dominant player in chip design and manufacturing.

Not surprisingly, semiconductor stocks were among the worst performers on US exchanges last week. Nvidia was the worst performer on the S&P 100, losing 7.2% over the week. Trade war worries dominated sector performance in the S&P 500. Farm machinery was the worst performing sector in the broad index, an unsurprising result given the vulnerability of US farm exports.

The best-performing sectors all had a negative correlation to term yields: utilities, real estate investment trusts, consumer staples and homebuilders.

I continue to recommend defensive sectors in the US in a barbell with Chinese equities.
 
Biden won't win against Trump. It will be Hillary Part 2.

Bernie has a much better chance. But unfortunately, it seems like Biden is leading right now.

Polls didn't predict Trump winning and this is probably more of the same establishment bias.
 

SteelBird

Colonel
I'm afraid this won't be good news. It could be better or it could be worse. Google break up with Huawei in compliance with Trump's order.
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phynex92

New Member
Registered Member
Anyways, Google did reply that all existing Huawei phones will have their services intact. I can personally confirm that my EU variant of P20 Pro hasn't had any GMS related issues in the US right now. No word on upcoming new phones though.
 

Totoro

Major
VIP Professional
Gmail use is so widespread that people won't want to switch to another service. It will be a case of "Huawei doesn't have Gmail? Oh I'll buy this other brand instead. "

Google maps is in app that users may be comfy with replacing. But replacement isn't easy or quick to make. To make an equally good system years might be required.

App store can also be replaced and developers wooed to put their apps on the new Huawei store. But that too would take a year or more until enough developers/apps come.

There is a big chance Huawei handsets outside China see a sales drop of over 50% in the coming year.
 

tower9

New Member
Registered Member
Gmail use is so widespread that people won't want to switch to another service. It will be a case of "Huawei doesn't have Gmail? Oh I'll buy this other brand instead. "

Google maps is in app that users may be comfy with replacing. But replacement isn't easy or quick to make. To make an equally good system years might be required.

App store can also be replaced and developers wooed to put their apps on the new Huawei store. But that too would take a year or more until enough developers/apps come.

There is a big chance Huawei handsets outside China see a sales drop of over 50% in the coming year.

I agree. The google package issue is a major blow to Huawei. They won't be able to compete overseas effectively.
 
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