U.S. planning to tighten the noose around Huawei

U.S. planning to tighten the noose around Huawei
If you didn't know that Huawei has been banned from accessing its U.S. supply chain (which it spent $11 billion on last year) since the middle of May, the performance of the company wouldn't give it away. Using stockpiles of components and temporary 90-day licenses, Huawei has been able to build new phones and update older ones. It also got a break when U.K. based ARM Holdings reversed its position after originally saying that it had to cut ties with the Chinese manufacturer. At first, ARM blamed U.S. technology used on its chip designs but later said that "ARM’s v8 and v9 are U.K.-origin technologies."

If there is one U.S. based company that Huawei would like to do business with, it is Google. With the ban in place, Huawei cannot install the Google Play services version of Android on new models like the Mate 30 series and the foldable Mate X. Instead, those phones have an open-source version of Android installed. As a result, Google's core Android apps like the Play Store, Maps, Search, Gmail, and others cannot be used on these devices. Now that might not matter inside China where the government has banned most Google apps. But international sales are certainly hurt by the inability of Huawei to license Google's Android offerings.

Commerce Department officials seek to tighten restrictions on Huawei

When the ban was first announced, many saw it as severely damaging to Huawei's handset business. But what these nay-sayers weren't counting on was the strong patriotism among Chinese consumers who started buying Huawei handsets to protest what they saw as bullying on the part of the U.S. During the third quarter, Huawei shipments inside China soared an incredible 66% year-over-year giving the outfit a 42.4% market share in its home country. And Huawei is holding its own outside China; globally it shipped 66.8 million units from July through September up 28.5% year-over-year and 18% sequentially. Huawei's global market share has risen from 14% to 18% over the year.

While the relationship between the Trump Administration and Chinese President Xi Jinping wavers between hot and cold, the U.S. is looking to tighten the ban against Huawei. According to Reuters, two rule changes are being discussed by Commerce Department officials even as the U.S. Commerce Department starts handing out 90-day licenses to Huawei suppliers in the U.S. The three-month reprieve allows these American firms to ship software and components "necessary to maintain and support existing and currently fully operational networks and equipment, including software updates and patches."

If the rule changes are made by the Commerce Department, the U.S. will have more control over foreign shipments to Huawei of non-sensitive software and components that contain American-origin parts or technology; this would include standard chips for smartphones. Washington trade lawyer Doug Jacobson said that such a move on the part of the U.S. would be "a major expansion of the reach of U.S. export controls and would be poorly received by U.S. allies and U.S. companies." Jacobson said that even if the U.S. tightens its control over Huawei's supply chain, the company will find a way to get the supplies it needs.

The rules that the Commerce Department is looking at making tougher include one called the De minimis Rule. This rule decides whether American content in a product made overseas gives the U.S. government the right to block exports of that product from foreign countries. The second rule, known as the Direct Product Rule, places under U.S. regulations products made overseas that include U.S. technology or software.

Huawei was placed on the entity list because the U.S. government considers the company to be a national security threat. That's because, under Chinese law, the government can demand that Huawei collect intelligence on American corporations and consumers. As a result, U.S. lawmakers fear that Huawei's phones and networking equipment contain backdoors that send information to Beijing. The company has repeatedly denied this.



1. Charlie2k

Posts: 157; Member since: Jan 11, 2016

"The company has repeatedly denied this." and also nobody have been able to prove these allegations. This is a clear case of US gov trying to save US corporations that Huawei is crushing by dedication and innovation. Tim Cook have had a handful of dinners with Donald Trump lately. It clearly has gotten more difficult to sell old tech at high prices and assistance from the lawmakers is required.

3. meanestgenius

Posts: 22487; Member since: May 28, 2014

Facts. These allegations have yet to be proven. The U.S. couldn’t even supply a shred of evidence to Microsoft when they asked. As far as your second statement goes, I’m really starting to believe that certain U.S. corporations may indeed be urging the U.S. government to try and stifle Huawei due to Huawei having superior tech and IP that allows them to be so successful.

5. Vancetastic

Posts: 1754; Member since: May 17, 2017

I'm starting to wonder about this myself.

7. meanestgenius

Posts: 22487; Member since: May 28, 2014

It really does make you think.

13. Vancetastic

Posts: 1754; Member since: May 17, 2017

Especially considering the child-like paranoia of the current Commander in chief...

11. ShadowSnypa786

Posts: 622; Member since: Jan 06, 2017

"This is a clear case of US gov trying to save US corporations that Huawei is crushing by dedication and innovation. Tim Cook have had a handful of dinners with Donald Trump lately. It clearly has gotten more difficult to sell old tech at high prices and assistance from the lawmakers is required." That conspiracy theory doesn't make sense, isn't Samsung more of a threat to these US corporations?? Right now Samsung is Apple's biggest threat. On top of that Samsung makes their own displays, their own RAM, their own UFS 3.0 storage, their own CPU's, their own camera sensors but yet nothing has happened to them. Years ago they were making their own operating system.

12. maherk

Posts: 7011; Member since: Feb 10, 2012

Except that they did try to fuel a legal war against Samsung, and that didn't take them anywhere. And in this instance, Huawei is being pulled into this because China and the US are going through a trade war, and the US decided to drag Huawei into this. If SK and the US were to go into such a nasty war, trust me, the American government will find a way to drag Samsung into it, throwing claims left and right against them.

2. meanestgenius

Posts: 22487; Member since: May 28, 2014

Huawei has already been reducing its reliance on American made products/technology more and more, and has been sourcing them elsewhere and using its own in-house products/technology. This is just going to speed up the process of Huawei not having to rely on anything American made at all. Huawei is already still successful with the ban in place, and the Huawei Mate 30 line has exceeded 7 million units moved without Google Mobile Services. This move is just going to hurt U.S. companies more than Huawei in the long term.

8. Papa_Ji

Posts: 878; Member since: Jun 27, 2016

Let the huawei HMS project be successful. Its going pretty good... https://www.xda-developers.com/huawei-hms-core-android-alternative-google-play-services-gms/ Other than that they don't need any US spying tech.

9. meanestgenius

Posts: 22487; Member since: May 28, 2014

I agree. HMS is going very well for Huawei.

4. vagabonti

Posts: 9; Member since: Sep 26, 2017

Huawei crossed the boundary of the sports game. Their current success is a resounding, unpaid, silent voice ...

6. KingSam

Posts: 1505; Member since: Mar 13, 2016

How does "national security" explain blatantly trying to stifle Huawei from purchasing supplies it needs?

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