International Finance

Huawei ban shows China’s dependence on foreign chip technology

Huawei, Google, Intel, Broadcom, Qualcom. Trump administration
Major chipmakers like Intel and Qualcomm join Google to cut off business with Huawei, until further notice

With Trump’s Huwaei ban, Google has suspended business with the company  in terms of access to updates of its Android operating system. That said, chipmakers like Intel and Qualcomm have also stopped supplies to the company in an effort to comply with orders from the US government. With the Trump administration seeking to blacklist Huawei worldwide implies that China is heavily reliant on foreign chip technology.

Google spokesperson said, “We are complying with the order and reviewing the implications.” He also added that for Google users, services such as Google Play and protections from Google Play Protect will function normally on existing Huawei devices.

According to reports from Bloomberg, Intel, Broadcom, and Qualcomm are freezing their business with Huawei, until further notice. The move is effective immediately. Another Bloomberg report suggests that Huawei has anticipated this situation for a long time. The company has stockpiled enough chips and other components in an effort to keep its business running for at least three months.

“The impact on Huawei will be extremely significant. An obvious impact is on the supply chain, but there is another layer of impact on confidence and its overall business,” Cui Kai, a telecom analyst with IDC, said. “It will also have a negative impact on the 5G technology evolution around the world.”

The Trump administration’s move against Huawei may have consequences in the near future. For example: blocking the sale of components such as semiconductors could affect the business between Qualcomm and Micron Technology, and stall 5G wireless networks’ developments worldwide.

According to Kai, Huawei has been well prepared in various areas, including ‘R&D and business continuity’ to ensure its operations are not severely affected under similar circumstances. 

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