Huawei's bad weekend

680 Views | May 21, 2019

Huawei's bad weekend

Intel, Qualcomm and other chip makers reportedly join Google in Huawei ban.

Huawei's bad weekend is getting worse as its US suppliers all comply with a US government decree forbidding them to deal with the company. Bloomberg reported that Intel, Qualcomm and Broadcom are immediately terminating their relationship with Huawei. Nikkei says the German manufacturer Infineon Technologies has also suspended shipments to Huawei, as well as US manufacturers Micron Technology and Western Digital.

Chip suspensions follow the first of Google's news brutally cancel Android Huawei and put an end to its access to Google Play and Play Store services, effectively dumping it into the Android smartphone market and forcing the Chinese company to develop its own version at the top of the barebone open -source edition of Android.

According to Bloomberg sources, employees of leading US chip makers have been told that their companies will freeze their supply contracts with Huawei until further notice. Intel is supplying Huawei with server chips and processors in its notebook lineup, while Qualcomm is lagging behind in providing modems and other processors. Huawei is actually quite isolated from the Qualcomm impact because it builds its own processors and mobile modems. Another Bloomberg report states that Huawei has also prepared for this event by storing chips from US suppliers for at least three months, which should leave enough time to say whether the current measure is an alarmist tactic or a permanent imposition from the US government.

Nikkei sources suggest that Europe could be down online as well. "Infineon decided to take a more cautious step and stopped the shipment. But he will hold meetings this week to discuss [the situation] and make assessments, "said a source speaking to Nikkei. In a statement, Infineon said that "the vast majority of Infineon products delivering to Huawei are not subject to US export control rights restrictions, therefore, these deliveries will continue. Nikkei also reported that the European chip maker ST Microelectronics is discussing its deliveries continued from Huawei this week as well.

Huawei has developed internal alternatives to Android and Windows, specifically to try to remedy a situation such as this one. Microsoft has not yet announced whether it will continue to provide the Windows operating system for Huawei laptops, but it is likely that it will also comply with US government orders.

The US government has long been trying to keep Huawei out of the group. Last year, the company relentlessly pushed its efforts to enter the US telephone market. The current escalation is part of an increasingly hostile trade dispute between the Trump administration and the Chinese government, with the former attempting to force a renegotiation of the trade relationship between the two.

Huawei's founder, Ren Zhengfei, downplayed the impact of the US executive order that could cripple Huawei's ability to collaborate with US companies such as Google and Qualcomm. In comments to Chinese media gathered at the company's headquarters in Shenzhen, reported by the state-run Global Times newspaper, Ren said the 90-day extension of normal US trade relations would make little difference for Huawei because of the existing contingencies of the company.

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