Huawei: After the ban by the US, the Chinese are planning the counter-attack


Dhe dispute between the US government and the Chinese technology giant Huawei is getting worse. Last week, US President Donald Trump issued a decree calling for a national telecommunications emergency and banning American companies from using telecommunications technology classified as a national security risk, particularly Huawei. Now the Chinese are preparing for countermeasures.

"Today, the course of fate turns to this extreme and dark moment. The superpower mercilessly broke through the system of technical and industrial global cooperation and made the crazy decision to blacklist Huawei without a sound foundation, "wrote Huawei's chief chip division leader He Tingbo in a message to the staff. He leads the group subsidiary HiSilicon.

Just before the weekend, the US Department of Commerce had placed Huawei and 70 of its subsidiaries on the list of banned companies. US companies are prohibited from doing business with Huawei without government approval.

Evidence remained the US guilty so far

Observers believe that these permits will not be issued. The US government accuses Huawei of using its technologies to facilitate Chinese spying activities. Evidence has not yet been disclosed. Huawei has rejected these allegations for years.

"All of the evasive measures we planned became overnight Plan A," Chip boss He now writes in her memo. The company has reportedly been preparing for this case for years. Now, the plan is to "ensure the strategic security of most of the company's products and the continued delivery of most products".

Trump declared national emergency to tackle Huawei

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The US suspects communications giant Huawei of helping China espionage. US President Donald Trump now wants by decree to protect domestic telecommunications from threats from abroad.

Huawei has been using HiSilicon to become a larger chip producer in recent years. Last year, the company produced according to Huawei data chips worth 7.5 billion US dollars. In the top smartphones of the group are often the in-house chips called Kirin.

But Huawei is far from independent for a long time. The company said it spent $ 11 billion on components in the US last year. Last November, the group published for the first time a list of its key suppliers. Every third comes from the US, including companies such as Qualcomm, Nvidia, Intel and Seagate. Qualcomm accounts for about five percent of Huawei's sales, and six percent for Broadcom.

Huawei has stocked up on components

Although Huawei is developing some of its chips themselves, they are to a large extent produced by TSMC in Taiwan. It is still unclear whether the US ban also affects suppliers who are domiciled abroad but for their part purchase US technology. This would include companies such as TSMC, but also Japan Display, Sony and the memory manufacturer Nanya Technology.

Six months ago, Huawei reportedly told its suppliers that it intends to build up an annual supply of key components to cope with uncertainties in a trade dispute. In addition, Huawei has reportedly increased the number of component suppliers to spread the risk.

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What could be at stake for Huawei was the shock in the industry when last year the US government shut down network supplier ZTE with a supplier stop because it allegedly violated sanctions against Iran and North Korea. After just one month, ZTE was forced to discontinue operations with 80,000 employees. The fact that ZTE still exists today is due to an agreement between US President Donald Trump and Chinese President Xi Jinping. In the end, ZTE had to pay a billion fine and replace all members of the board.

Your own operating system will have a hard time

"We are much more independent in comparison," said Huawei's smart phone CEO Richard Yu in the past year in an interview with WELT. But that is only partially true. So runs on the devices of the now second largest smartphone manufacturer in the world, the Android operating system of the US group Google. On the Huawei notebooks the Microsoft operating system Windows is installed. In March, Yu revealed to WELT that the company has now prepared its own operating system. "Should it happen that we can no longer use these systems, we would be prepared." This is plan B.

So far, however, all smartphone operating systems with the exception of Apple's iOS and Google's Android have failed. Their advantage is barely recoverable. This mainly affects the number of applications in the app stores.

However, the current situation could boomerang in the sense that Huawei and other Chinese high-tech companies are increasingly pressing to develop and produce components and technologies in their own country in order to free themselves from US dependency in the future. But Huawei is not ready yet. At best, stockpiling and Plan B will only help to survive a few months before a political solution can be found.

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