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Introduction: There is no lack of opposition to U.S. policies in the industry. The subsequent negotiations between China and the United States will also affect the decisions of suppliers. And this current opportunity may become a step for Huawei to turn crisis into opportunity and go further.
Source丨21Tech (ID: News-21)
Editors丨Li Qingyu, Huang Kai, Li Yutong
Part of the content comes from CCTV News and Global Times
U.S. chip suppliers secretly put pressure on the government to relax the ban on Huawei
On June 17, Global Network quoted relevant reports as saying that many companies, including Intel, Qualcomm and Xilinx, U.S. chip suppliers are secretly putting pressure on the U.S. government to relax its supply ban on Huawei.
According to reports, executives from top U.S. chip manufacturers Intel and Xilinx attended a meeting with the U.S. Department of Commerce at the end of May to discuss countermeasures after Huawei was blacklisted.
The report mentioned that the U.S. government declared that Huawei had "national security issues" and prohibited U.S. suppliers from supplying Huawei without government permission. Three people familiar with the matter said that U.S. chipmakers believe that Huawei's unit responsible for selling products such as smartphones and computer servers uses conventional components and is unlikely to have "security concerns" similar to its 5G network equipment.
"This is not to help Huawei, but to prevent harm to American companies." One of the sources said. The report also mentioned that Huawei purchased a total of US$70 billion worth of components in 2018, of which approximately US$11 billion worth of components came from US companies, including Qualcomm, Intel, Micron, etc. People familiar with the matter also revealed that Qualcomm hopes to continue selling chips to Huawei for making general-purpose devices such as mobile phones and smart watches.
According to the report, the U.S. Semiconductor Industry Association (SIA) admitted that it has arranged many consultations and talks between companies and the U.S. government to help (industry companies) comply with the ban, and also used this to brief government officials on the impact of the ban on ( U.S.) companies. "It seems that technology that has nothing to do with national security should not be included in the ban. We have conveyed this view to the government." Jimmy Goodrich, SIA's vice president of global policy, said.
The Huawei ban has triggered a chain reaction in the semiconductor industry chain. U.S. giants Broadcom and Texas Instruments have expressed the negative impact of trade friction and the Huawei ban on the company. Broadcom has also lowered its revenue for the current fiscal year. expected.
If you don’t do business with Huawei, 40% of your revenue will be lost! Survival strategies for Huawei suppliers under the US ban
Suppliers’ choices
On May 16, the news of the US ban broke the daily work rhythm of Shanghai Jun A , overnight I entered a rhythm of often working overtime.
Mr. A works for the Chinese branch of a well-known American semiconductor company, which happens to be Huawei's hardware supplier. The Bureau of Industry and Security (BIS) of the U.S. Department of Commerce has placed Huawei on the "Entity List" and controls the supply of U.S. companies to Huawei.
Seeing that the list is about to be implemented, there is not much time left for both parties. After two or three days, the company has to comply with local laws and make adjustments. The email from the headquarters of this American company has not yet been sent, but the Chinese region has already taken the lead to supply Huawei with supplies in advance.
As soon as the Huawei incident broke out, all global suppliers in the industry chain were not spared.
Since the delivery time should be a few days after the ban, Mr. A’s company immediately supplied Huawei in advance. "The ban is just a matter of time. In order to deliver ahead of schedule, on the one hand, we need to rush the processing, and on the other hand, we need to mobilize other sources of goods." Mr. A recalled: "Although it seems simple, it needs to be coordinated internally and externally. The production department is only one part. (Difficulty), because we had to mobilize and replenish supplies, we also had to coordinate with customers. ”
Soon, a relevant email from the headquarters arrived the next day, requesting the suspension of trade and technical exchanges with Huawei. Mr. A said that based on the email, the company should be applying for a license.
This also means that Huawei has been prepared for this and has sufficient inventory for about a year.
On the other side of the ocean, semiconductor manufacturers in the United States are working overtime.
An engineer from Silicon Valley posted on the forum: "Our company has basically not slept for more than 36 hours in the past few days (a few days after May 16). The entire company is delivering goods to Huawei at full power, (weeks) 5) Staying up all night, Huawei will buy all the finished and semi-finished products. Because of Trump, Silicon Valley has been hit hard. Even worse than our company, some American device suppliers do not do business with Huawei. The revenue of thirty or forty years is gone.”
In this engineer’s opinion, Silicon Valley companies can be called “retaliatory support for Huawei.” “We basically don’t sleep before domestic pre-sales and sign orders. The process originally took one and a half months. We will sign it for you in three hours. The headquarters is also working in shifts to sign as many contracts as they can before the ban is issued. All other customer matters are put aside, and all research and development work is handed over to Huawei.
”
On May 20, American Internet companies and semiconductor companies began a new round of adjustments. So far, there have been repeated messages from suppliers, also because companies are checking products and communicating solutions. .
There is also a lack of opposition to the policy in the industry, and the subsequent negotiations between China and the United States will also affect the choices of suppliers. p> There are countermeasures below
Although political factors have increased the complexity of the incident, the particularly vicious aspect is the long-arm jurisdiction principle of the United States. Even if it is not an American company, as long as the hardware and software are used in the products supplied to Huawei If the U.S. portion exceeds 25%, it will have to comply with the ban. This will cause companies outside the United States to be subject to regulation.
But companies in the industry chain are not helpless. It can be said that "there are policies from above and countermeasures from below." GM.
He also said: “This forms a G2 (two-state group) within the company. If the trade war lasts longer, or this measure will become the standard for many international companies: that is, the US team/US branch will be responsible for US customers, and the overseas team/branch will be responsible for non-US customers. So G2’s modes are also diverse. "In his view, the semiconductor industry chain structure is now shifting from globalization to regionalization.
In addition to the response in G2, Gu Wenjun also mentioned that European and American suppliers may respond to U.S. policies in terms of internal division of labor. More efforts will be made in research. In addition, more supplies will be sought, such as sources of technology and engineers.
In addition, some companies are also using global production capacity to resist the risk of trade friction. > For example, Liu Yangwei, general manager of Hon Hai Group S, recently stated that Hon Hai has established production bases in 16 countries and regions outside mainland China, and has established R&D units in 4 countries and regions, emphasizing that in China The production capacity outside the mainland is sufficient to meet demand. As long as the environment and customers require it, production capacity can be expanded in the 16 countries with production bases.
While actively responding, there is also good news about the ban on Huawei's supply chain. Later, the U.S. Department of Commerce announced that the ban on Huawei would be postponed for 90 days. On June 12, Tianfeng International Securities analyst Ming-Chi Kuo pointed out in the latest report that mobile phone component suppliers are moving forward without violating the U.S. export ban. The business relationship with Huawei has been restored one after another.
Guo Mingchi believes that the reason for the change in attitude of component suppliers is that the United States does not have a clear definition of export controls, and Huawei and its suppliers are reluctant to resume business relations with each other. The motivation is strong, and the current supply chain globalization and technological autonomy are high, and the focus of the recent Sino-US conflict has shifted to other topics.
The report also predicts Huawei’s mobile phone sales this year. It needs to be discussed in two scenarios, but in either case, it will be higher than the market expectation of 180 million to 210 million units.
The first scenario is that if the United States maintains the status quo on Huawei’s export controls, Ming-Chi Kuo. It is estimated that Huawei's mobile phone shipments in 2019 will be 210-220 million units;
The second scenario is based on this, if Huawei can start shipping in October equipped with self-developed Hongmeng System mobile phones, Huawei’s mobile phone shipments in 2019 are expected to be 215-225 million units
Photo/Xinhua News Agency
Huawei’s rotating chairman Hu Houkun once said in an interview that Huawei’s industry involves. There are 13,000 suppliers, and the purchase amount last year exceeded US$70 billion. Companies and countries in the entire industry chain are actually interdependent. If any link is abnormally blocked, the development of the entire industry chain will be affected. It will have a very big impact on the development of the global economy.
This current opportunity may be a step for Huawei to turn crisis into opportunity.
Extension: Spain starts. Commercial 5G, the core supplier is Huawei
Vodafone, the world's leading telecom operator, recently announced that it will launch commercial 5G networks in 15 cities in Spain on the 15th, and Huawei is the core supplier of this 5G commercial network.
These 15 cities include Madrid, Barcelona, ??etc., which will make Vodafone the first 5G network operator in the Spanish market, and Spain will become another European country to open a 5G commercial network after Switzerland and the United Kingdom. .
On June 10, Antonio Coimbra, President of Vodafone Spain, spoke at the launch ceremony of 5G services
On the 30th of last month, British telecom operator EE Company officially launched 5G services in 6 major British cities including London. EE said it will continue to use Huawei equipment in part of its 5G network infrastructure.
On May 30, EE, a subsidiary of British Telecom, officially launched 5G services in six major cities in the UK. This is also the first 5G service officially launched in the UK.
Spanish people welcome the use of Huawei equipment in 5G services
After learning that Vodafone’s 5G commercial services will use Huawei equipment, local Huawei users in Spain expressed great expectations. Many people think , Huawei's products are of excellent quality. Some people think that Huawei has a lot of competitiveness compared with other brands, and aspects such as the password system make this brand trustworthy.
Enrique, a local resident in Spain, said: I have used Huawei four years ago and like its design and technology, including its software and camera functions. Huawei has the best 5G technology and I'm pretty sure it will work very well.
People and experts criticize the United States for suppressing Huawei
As the economic and trade friction between China and the United States escalates, the United States suppresses Huawei. This move has caused strong dissatisfaction among Huawei users in Spain. Many Spanish people said This move by the United States violates free market rules.
Eric, a local Spanish resident, said: I think what the United States has done is very bad, because all of the Western world is advocating free markets, but it does not allow the East to have the same channels.
In addition, Spanish economist Juan Dugorez said that the United States’ suppression of Huawei can be said to be shooting itself in the foot. Companies from Western allies are adversely affected.
South Korea 5G evaluation: Huawei equipment support services are the most stable
LG U+ is the only company among the three major communication service providers that uses Huawei equipment to build 5G networks. However, there are also voices that believe that LG U+ first concentrated on building 5G networks in the capital area, and the evaluation is not comprehensive enough.
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