Tech companies stop selling to Huawei after Trump's Executive Order

So many executive orders, so much twitter. What to do? Well, discuss it here for one...

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Tech companies stop selling to Huawei after Trump's Executive Order

#1 Post by highdesert » Mon May 20, 2019 5:00 pm

Top U.S. corporations including chipmakers and Google have frozen the supply of crucial software and components to Huawei Technologies Co., complying with a Trump administration crackdown that threatens to choke off China’s largest technology company. Chipmakers including Intel Corp., Qualcomm Inc., Xilinx Inc. and Broadcom Inc. have told their employees they will not supply Huawei until further notice, according to people familiar with their actions. And Alphabet Inc.’s Google cut off the supply of hardware and some software services to the Chinese giant, another person familiar with the decision said, asking not to be identified discussing private matters.

The moves, which had been expected, hamstring the world’s largest provider of networking gear and No. 2 smartphone vendor. The Trump administration on Friday blacklisted Huawei — which it accuses of aiding Beijing in espionage — and threatened to cut it off from the U.S. software and semiconductors it needs to make its products. Blocking the sale to Huawei of crucial components could also disrupt the businesses of American chip giants such as Micron Technology Inc. and slow the rollout of vital 5G wireless networks worldwide — including in China. That in turn could hurt U.S. companies that are increasingly reliant on the world’s second largest economy for growth.

If fully implemented, the Trump administration action could have ripple effects across the global semiconductor industry. Intel is the main supplier of server chips to the Chinese company, Qualcomm provides processors and modems for many of Huawei’s smartphones, Xilinx sells programmable chips used in networking, and Broadcom is a supplier of switching chips, another key component in some types of networking machinery. Representatives for the chipmakers declined to comment. Huawei “is heavily dependent on U.S. semiconductor products and would be seriously crippled without supply of key U.S. components,” said Ryan Koontz, an analyst at Rosenblatt Securities Inc. The U.S. ban “may cause China to delay its 5G network build until the ban is lifted, having an impact on many global component suppliers.”
To be sure, Huawei is said to have stockpiled enough chips and other vital components to keep its business running for at least three months. It’s been preparing for such an eventuality since at least the middle of 2018, hoarding components while designing its own chips, people familiar with the matter said. But its executives believe their company has become a bargaining chip in ongoing U.S.-Chinese trade negotiations, and that they will be able to resume buying from American suppliers if a trade deal is reached, they said.
https://www.latimes.com/business/la-fi- ... story.html

China has spent nearly two decades building a digital wall between itself and the rest of the world, a one-way barrier designed to keep out foreign companies like Facebook and Google while allowing Chinese rivals to leave home and expand across the world. Now President Trump is sealing up that wall from the other side.
If China and the United States have begun a technological Cold War, then the Huawei order can best be seen as the beginnings of a digital Iron Curtain. In this potential vision of the future of technology, China will continue to keep out much of the world. The United States and many other countries, goes this thinking, will in turn block Chinese technology.

The tougher American stance is closing off many of the ways that the United States and China exchanged ideas and did business despite the strict Chinese censorship regime. Those closed doors could have profound effects not only on the business of technology, but also on how the world will use and understand the devices and services of the future.

Already, China’s censorship and tight control of its citizens’ digital lives have effectively isolated one-fifth of the world’s internet-using population, giving rise to a generation that doesn’t know what it means to Google something or to subscribe to a YouTube channel.

The aggressive new stance by the United States will only speed up that process, opening a potential window to a day when Chinese people can use only Chinese phones and gadgets powered by homegrown chips and software. All this is happening with a speed that has shocked many in China.
China has ways it could retaliate. On Monday, China’s state media reported that Xi Jinping, China’s top leader, visited a site that mines and processes rare earths, which are essential minerals for a number of manufacturers in low-carbon technologies. His visit was a none-too-subtle reminder that China has a commanding presence in rare earths and could shut off global supplies — something it has done once before.

The digital Iron Curtain has been long in the making. From its earliest days dealing with the internet, the Chinese government has squelched content it didn’t like. Today, the Chinese internet at first glance doesn’t look much like the one the rest of the world uses. It has different platforms, ideals and business strategies, all tended carefully by censors.
Others in China point to the country’s own barriers against competitors as a strategy that was going to provoke retaliation sooner or later. At some point, the United States was bound to use reciprocity in dealing with a closed Chinese internet market. One popular blog post explained that reciprocity has been translated into “mutual benefit” in Chinese, which explains why many in China didn’t understand that the idea could be used in retaliation.

Another popular blog post drives the point even more clearly.

“You’ve been opposing the U.S. for many years,” said the headline. “You should be long prepared that the U.S. will oppose you one day.”
https://www.nytimes.com/2019/05/20/busi ... trade.html
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

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