Huawei

Huawei's U.S. suppliers get another 90-day license

by Alan Friedman / Nov 19, 2019, 11:38 AM

Huawei's U.S. suppliers get another 90-day license

Yesterday, for the third time since it banned Chinese manufacturer Huawei from the stateside supply chain, the Trump administration issued a 90-day license allowing U.S. companies to do business with Huawei. The previous 90-day exemption period expired yesterday and earlier reports said that the Commerce Department would grant U.S. suppliers six-month temporary licenses enabling them to do business with Huawei. But that changed and as recently as last Friday, the grace period was rumored to be for two-weeks only. Reuters reports today that over the weekend, Trump administration officials changed their minds and decided to grant 90-day exemptions instead.

As U.S. officials have discovered, it is not easy to punish a company that you perceive to be a security threat when it happens to be the world's leading provider of networking equipment. Some of Huawei's customers are small wireless operators in rural areas of the country and these carriers rely on Huawei gear for their 3G and 4G networks.

The U.S. Commerce Department is concerned about leaving rural Americans without internet service

Commerce Secretary Wilbur Ross said yesterday that the extension "will allow carriers to continue to service customers in some of the most remote areas of the United States who would otherwise be left in the dark. There are enough problems with telephone service in the rural communities - we don’t want to knock them out. So, one of the main purposes of the temporary general licenses is to let those rural guys continue to operate." Ross added, "The department will continue to rigorously monitor sensitive technology exports to ensure that our innovations are not harnessed by those who would threaten our national security." In addition to claims that it steals intellectual property from American tech firms, Huawei is considered a threat to U.S. national security for another reason as well. Because of fears that the Chinese government will demand that it spy on consumers and corporations, American lawmakers are concerned that the company's phones and networking equipment contain technology that will send intelligence to Beijing. The company has denied this repeatedly. Last week, U.S. Attorney General Bill Barr said that Huawei and fellow Chinese manufacturer ZTE "cannot be trusted."

The Commerce Department has yet to put into effect an executive order signed by President Donald Trump back in May. The order declared a national emergency and banned U.S. companies from using networking equipment procured from firms considered to be threats to U.S. security. A plan was supposed to have been put in place by the middle of last month.

U.S. Commerce Secretary Wilbur Ross says that the U.S. can't leave rural Americans without internet service

Besides getting parts from its stateside suppliers thanks to the temporary licenses, Huawei has also been able to obtain U.S. components and software from the overseas units of American companies. And ARM Holdings, the U.K. chip designer whose architecture is important in the creation of Huawei's Kirin chips, reversed its position and said that it can do business with the firm after all. Originally, ARM said that some of its designs contain "U.S. original technology;" last month the company stated that "ARM’s v8 and v9 are UK-origin technologies."

The U.S. supply chain ban has had an impact on international sales of Huawei's latest phones since they cannot use the Google Play services version of Android. Google cut ties with Huawei back in May forcing the manufacturer to install an open-source version of Android on its current flagship line. Not being able to use Google apps like the Play Store, Search, Gmail, Maps and others might not bother Chinese consumers since Google is not fully welcomed in the country, and Huawei continues to dominate its rivals inside China. Strong domestic sales have Huawei looking to ship 270 million handsets this year, just 10% off of its pre-ban estimate of 300 million units.

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6 Comments

1. meanestgenius

Posts: 22470; Member since: May 28, 2014

With U.S. companies set to lose revenue to the tune of 11 billion, I'm pretty sure there are a lot of companies putting pressure on the U.S. to allow Huawei to still do business with them. Don't get me wrong, Huawei stands to lose also, but I bet they have had an easier time recouping lost revenue than U.S. companies would.

posted on Nov 19, 2019, 4:57 PM 6

3. dimas

Posts: 3414; Member since: Jul 22, 2014

And after 90 days again, all of them will be asking fortune tellers if doing business with huawei is practical or not. Whether huawei is a security threat or not, america's doing a great job giving stress to china and huawei management.

posted on Nov 19, 2019, 7:48 PM 0

5. meanestgenius

Does it nighttime you to be so wrong all of the time? It should. After 90 days, they will all be saying what they’ve been saying, which is they still want to do business with Huawei. The FACT is that U.S. suppliers stand to lose more than Huawei does. Huawei can, and already has in some cases, replace U.S. businesses that wish to do business with them with overseas ones.

posted on Nov 19, 2019, 10:07 PM 4

2. dimas

Another 90days? America really is toying with china's favorite tech company right now. They make it uneasy for huawei's marketing if they will still do business with U.S. after the 90-day extension. I want to hear huawei's response if they will stick to their fake bravado of "we don't need america" motto. Decades of copyright infringement and patent stealing is getting paid by huawei.

posted on Nov 19, 2019, 7:44 PM 0

4. jiangqiushi

Posts: 37; Member since: May 28, 2019

this is mainly for the rural telco who rely on Huawei. Of course Huawei want US suppliers, but if baby trump want to cause pain in the short term, Huawei will switch to other sources, the long term pain will be felt by the US and their suppliers.

posted on Nov 19, 2019, 8:06 PM 0

6. meanestgenius

Huawei will say what their founder and CEO has said, and now, what their Chairman has said as well, which is they don’t need the U.S. to continue to do the business that they do, and that U.S. companies that they do businesses with will be hurt more by this in the long run: https://www.cnbc.com/2019/11/18/huawei-chairman-speaks-about-us-blacklist-impact-at-east-tech-west.html You can say whatever rhetoric you want, but the fact is that Huawei can survive and thrive without the U.S. They’ve been proving it during all of this BS political propaganda nonsense.