Exclusive: Nokia and Ericsson plan emergency break-up over trade war and security fears
Nokia and Ericsson, two of Europe’s biggest technology titans, are weighing drastic changes to their corporate structures, including setting up separate units in the Eastern and Western Hemispheres, in a bid to protect themselves against the escalating global trade war.
Both companies, which make equipment used to run 5G networks, have started drawing up emergency plans to move some of their most sensitive operations out of China and split up their supply chains to counter increasing national security concerns, sources have told The Sunday Telegraph.
Huawei Ban Could Come Back to Bite U.S.
SAN FRANCISCO — Despite Huawei’s bluster and assertions by its founder that the U.S. has underestimated the Chinese telecommunications giant, the short- to medium-term impact of being cut off from the supply of U.S. chips and other components is likely to be severe, with some observers going so far as questioning whether Huawei can remain viable.
Longer term, however, some analysts believe that it is U.S. suppliers who will feel the pain most acutely as China responds to the ban on U.S. companies selling chips and other components to Huawei by redoubling efforts to become self-reliant and placing heightened emphasis on sourcing components from suppliers based in Europe and elsewhere in Asia.
If you look at electronic systems companies in China — smartphone companies or whoever — basically all of their future designs for as far as we can see for probably decades out now, when they go to do a new design for a system, they are going to be looking at non-U.S. parts,” said Bill McClean, president of IC Insights, in an interview with EE Times.
McClean said that going forward, Chinese systems suppliers will choose an alternative to a part offered by a U.S. company if the alternative is at all viable. If, for example, Texas Instruments has a part that competes with parts from companies such as STMicroelectronics, NXP Semiconductors, or Renesas Electronics, the Chinese company is going to go with one of the other vendors, McClean said.
“They’re going to avoid U.S. suppliers any chance they get going forward, even if this thing is settled tomorrow,” McClean said. “The fear of God has been put into them, and so they are going to be looking at South Korean companies, Japanese companies, and European companies, and if there is an alternative, they are going to pick it. I guarantee that. The trust is gone.”
Handel Jones, CEO of International Business Strategies, told EE Times that the ban on supplying Huawei is going to encourage an already-significant effort underway in China to become self-reliant. The Chinese government has already pumped billions into bolstering its domestic semiconductor production in recent years and is planning to invest more than $160 billion over 10 years in order to reduce its reliance on foreign semiconductors to supply its massive domestic semiconductor market.
“Longer term, what we see is a fairly significant effort to become independent of the U.S.,” Jones said. He estimates that China could be completely independent of U.S. chips in as soon as three to five years, as long as it still has access to TSMC or rival foundry Samsung Electronics.
According to Goldman Sachs, at least 70 American firms have significant exposure to Huawei. Most U.S. chipmakers, including Intel, Qualcomm, Xilinx, and Broadcom, have stopped supplying Huawei to comply with the U.S. government export ban. Non-American companies including Japan Display,
Toshiba, and TSMC have reported checking their supply chains for restricted American technology. (TSMC later announced that it would
The White House’s acting budget chief is pressing for parts of the US’s Huawei ban to be delayed an additional two years,
The ban could dramatically reduce the number of telecom manufacturers capable of supplying services to the government, says Russell T. Vought, the acting director of the Office of Management and Budget. He also says it could disproportionately affect telecom companies that serve rural areas.
Vought requested the delay in a letter directed to Vice President Mike Pence and several members of Congress. He specifically asks for restrictions on contractors and federal loan and grant recipients, enacted last year in a defense bill, to be delayed for an additional two years.
Every year, Congress appropriates funding for defense by way of a recurring piece of legislation called the National Defense Authorization Act. Lawmakers often tag on amendments targeting other policy issues by way of this must-pass legislation, and last year one of their main targets was Huawei and other Chinese telecom companies.
The Trump administration has spent the last few months citing Chinese companies, primarily Huawei, as national security risks. In January, the
Yet, it’s unclear if the Trump administration has implemented these bans on behalf of national security, or to use them as leverage in ongoing trade deal discussions.
That basically states that according to the Global Times, Vivo, Oppo and Xiaomi are testing Huawei's OS at Huawei's invitation.
Ah great, this is exactly what I hoped would happen! Cooperation between the Chinese phone makers and ideally Tencent in the future as well. The great irony is that this might have prompted concern and outcry from the West if it had happened without Trump's actions against Huawei, but thanks to Trump, this becomes a move that will be looked upon favorably and even applauded by many. Making lemonade from lemons!
Re-elect Trump!Ah great, this is exactly what I hoped would happen! Cooperation between the Chinese phone makers and ideally Tencent in the future as well. The great irony is that this might have prompted concern and outcry from the West if it had happened without Trump's actions against Huawei, but thanks to Trump, this becomes a move that will be looked upon favorably and even applauded by many. Making lemonade from lemons!
Gordon Chang says Huawei's troubles will only escalate with no trade resolution between the U.S. and China. Yahoo Finance's Julie Hyman, Adam Shapiro Dan Roberts and Emily McCormick discuss with Chang.