Huawei: Trump’s Surprise Moves Could Be Crucial For Huawei

18/05/2020    16

Huawei must be relieved the U.S. Department of Commerce has extended the company’s temporary license for another 90 days. Many had predicted that there would be no more extensions.

But on Friday, the waivers were extended, meaning U.S. companies that use Huawei technology could do so for the next three months.

Make no mistake, it’s not that the government was being supportive of Huawei – the license is there to protect those American companies, many of them rural internet providers, aren’t damaged. Though it’s previously been made clear that this is so those companies can wean themselves off their dependency on Huawei technology. For now, though, those companies have said that removing the Huawei equipment shouldn’t happen right now when people are depending on their internet connection more than ever.

Still, it’s a benefit for Huawei that the licenses continue, for sure. Although it doesn’t mean the latest phones, or future handsets, will be able to use Google Mobile Services (GMS) on their phones, it ensures that those phones with GMS access, like the just-revealed Huawei P30 New Edition, continue to be able to use them, for a start.

Good news for Huawei, then.

Because at the same time as the license was extended, President Trump’s government introduced something else: export controls. These are new rules which prevent makers of semiconductors who depend on American technology from shipping them to Huawei without explicit permission from the U.S. government.

The government accused Huawei of continuing to use American technology in semiconductor designs despite the Entity List which introduced export controls a year ago – and which was extended for another year just days ago.

But there was what’s been seen as a loophole: manufacturers were not stopped from being able to sell to Huawei if the material was made outside the U.S.

As the Financial Times has pointed out, the Huawei Pro includes radio-frequency modules which are needed for making calls and connecting to the internet. These were produced by three U.S. companies, Qualcomm, Skyworks and Qorvo.

So, the U.S. is tightening the screws. Any company wanting to sell to Huawei must have a license, even if not fabricated in the States.

The new rule applies to foreign-made items, which use U.S. technology.

Not great news for Huawei, but at least there’s one glimmer of light that’s positive: equipment or software made or shipped within the next 120 days is exempt.

Mixed messages, then in terms of how these new announcements will affect Huawei. The Chinese company has been reducing its reliance on U.S. tech as much as it could in the last year, which may ultimately hurt the American economy. For now, though, as Zak Doffman has pointed out, despite strong domestic sales, overseas Huawei has been suffering as rivals like Xiaomi try to take up the slack. Meanwhile, there may be effective retaliation from China as it draws up its own Entity list to focus on U.S. companies such as Apple.

Above all, it feels like this story will run and run.

Source: Forbes