Skip to main content

Huawei confident of finding solutions to new US move to curb chip supplies soon

Huawei
(Image credit: Future)

Huawei Technologies said that its business will inevitably be impacted by the amendments made by the US Department of Commerce to its foreign direct product rule that target it specifically.

The company's rotating Chairman Guo Ping, speaking at the Huawei's Global Analyst Summit 2020, said that the company has forged ahead against all odds and is confident of finding solutions soon.

“We still haven’t figured it out but we hope that our customers and suppliers will continue to stand with us and minimise the impact of this discriminatory rule,” he said.

A new rule unveiled by the US Commerce Department on Friday expands the US authority to require licenses for sales to Huawei of semiconductors made abroad with US technology.

Huawei was added to the US Entity List on May 16, 2019.

Ping's comments are the first official response from Huawei after the new measures announced to block global chip supplies to Huawei.

On Monday, China’s Ministry of Commerce warned it will protect “the legitimate rights and interests of Chinese enterprises,” but gave no details of potential retaliation. Beijing has threatened in the past to issue an “unreliable entities list” that might restrict operations of American companies in China.

Media reports said that Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the main chip manufacturer for Huawei, has stopped new orders in response to Washington's move.

“We have fulfilled our contractual obligations to customers and suppliers and have survived and forged ahead against all odds. Nevertheless, in its relentless pursuit to tighten its stranglehold on our company, the US government has decided to proceed and completely ignore the concerns of many companies and industry associations,” Ping said.

He said the company is committed to complying with the US rules and regulations and has significantly increased R&D and inventory to meet US pressures.

He added that the new sanctions will impact the expansion, maintenance, and continuous operations of networks worth hundreds of billions of dollars that have been rolled out by Huawei in more than 170 countries.

“The US’ moves against leading tech companies in other countries, in the long run, have shaken the country’s confidence in using American technology and escalating conflict in global industries and ultimately hurting the US interests,” Guo Ping, rotating Chairman of Huawei technologies.

“The US’ moves against leading tech companies in other countries, in the long run, have shaken the country’s confidence in using American technology and escalating conflict in global industries and ultimately hurting the US interests,” Guo Ping, rotating Chairman of Huawei technologies. (Image credit: Future)

Fragmented standards will benefit no one

Ping said that the fragmented standards and supply chains benefit no one if further fragmentation is about to take place and fragmentation will bring supply risk to global customers. 

“Foundations of trust and global collaboration will fracture and escalate the conflict between suppliers. The whole industry would pay a terrible price. Unified standards have fuelled incredible development,” he said.

However, he said that the US is leveraging its own technological strengths to crush companies outside its own borders.

“The US’ moves against leading tech companies in other countries, in the long run, have shaken the country’s confidence in using American technology and escalating conflict in global industries and ultimately hurting the US interests,” Ping said.

Huawei will never be closed off, he said, but more open than ever.

“Huawei grew rapidly with the suppliers and remain committed to a strategy of diversification and global supply chain,” he said.

Last year, Huawei purchased $18.7b from US suppliers in 2019.

“If the government allows, we will continue to buy from the US suppliers. Looking ahead, he said that the ICT industry has tonnes of potential by and will contribute $23tr to the global digital economy by 2025,” he said.