Huawei
UPDATED: Huawei now #1 global smartphone vendor
Despite the severe U.S. restrictions on Huawei, the company has succeeded in taking the top spot in the global smartphone market, according to figures from Canalys. The market research firm estimates Huawei shipped more smartphones worldwide than any other vendor for the first time in Q2 2020, marking the first quarter in nine years that a company other than Samsung or Apple led the market.
Note, however, that global smartphone sales DECLINED in the second quarter. Huawei shipped an estimated 55.8 million devices in the quarter, down 5 percent year on year. Samsung came second with 53.7 million smartphones, down 30 percent from a year earlier.
Huawei’s resilience was due to its strong position in China, where its shipments rose 8 percent in Q2. This offset an estimated 27 percent fall in its shipments abroad. Canalys estimates over 70 percent of Huawei’s smartphone sales are now in mainland China. That helps explains why the company can be so successful in selling smartphones, despite not being able to use licensed Google Android and associated apps on its latest flagship devices (that’s because Huawei was placed on the U.S. Entity list last year).
Canalys said the situation would likely not have happened without the Covid-19 pandemic. Huawei profited from the strong recovery in the Chinese economy, while Samsung has a very small presence in China, with less than 1 percent market share, and suffered from the restrictions in key markets such as the US, India, Brazil and Europe.
“This is a remarkable result that few people would have predicted a year ago,” said Canalys Senior Analyst Ben Stanton. “If it wasn’t for COVID-19, it wouldn’t have happened. Huawei has taken full advantage of the Chinese economic recovery to reignite its smartphone business. Samsung has a very small presence in China, with less than 1% market share, and has seen its core markets, such as Brazil, India, the United States and Europe, ravaged by outbreaks and subsequent lockdowns.”
“Taking first place is very important for Huawei,” said Canalys Analyst Mo Jia. “It is desperate to showcase its brand strength to domestic consumers, component suppliers and developers. It needs to convince them to invest, and will broadcast the message of its success far and wide in the coming months. But it will be hard for Huawei to maintain its lead in the long term. Its major channel partners in key regions, such as Europe, are increasingly wary of ranging Huawei devices, taking on fewer models, and bringing in new brands to reduce risk. Strength in China alone will not be enough to sustain Huawei at the top once the global economy starts to recover.”
As a result, it will be hard for Huawei to maintain its lead in the long term. Its major channel partners in key regions such as Europe are increasingly wary of stocking Huawei devices, taking on fewer models and bringing in new brands to reduce risk, as per the above Canalys quote from analyst Mo Jia.
Separately, Gartner estimates that 10% of smartphone shipments, or about 220 million units in 2020, will have 5G capability, but they’ll work on “5G” networks with a LTE core (5G NSA).
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Addendum:
Huawei’s just announced global licensing agreement with Qualcomm grants Huawei back rights to some of the San Diego-based company’s patents effective Jan. 1, 2020. It remains to be seen if Huawei will design smartphone components that use those patents in their next generation of 5G endpoint devices.
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References:
https://www.canalys.com/newsroom/Canalys-huawei-samsung-worldwide-smartphone-market-q2-2020
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Update- August 3, 2020:
According to market research firm Omdia, overall Q2-2020 smartphone shipment volume was down a hefty 15.7%, year-on-year, to 229.7 million units.
Samsung will certainly hope there are better times ahead. Omdia figures show the South Korean behemoth lost its #1 position in Q2, dislodged by Huawei. Samsung’s Q2 shipments plummeted nearly 28%, year-on-year, to 54.3 million.
Many of Samsung’s most important markets, were significantly impacted by COVID-19, especially emerging markets, which apparently accounted for more than 70% of Samsung’s overall shipments in 2019.
For its part, Samsung is hopeful of a Q3 smartphone recovery, helped by the launch of new flagship models, including the Galaxy Note and a new foldable phone.
Huawei, helped by a resurgent domestic market in China, snagged a 20% global smartphone share during Q2 (55.8 million units), up from an 18% market share the previous quarter. Year-on-year, Huawei’s Q2 shipment units were down a comparatively modest 4.9%.
Apple was one of the few OEMs to increase Q2 shipment volumes, year-on-year (up 13.1%, to 39.9 million units). The iPhone SE, a model with mid-range pricing, coupled with the iPhone 11, helped Apple expand its unit shipments, and cement its third-spot position with a market share of 14% (up from 11% in Q2 2019).
“With the launch of the iPhone SE in April, Apple has released a long-desired product, with an attractive price,” said Jusy Hong, director of smartphone research at Omdia.
“For existing iPhone users who needed to upgrade their smartphones in the second quarter, the new SE represented an affordable option that does not require a large downpayment or high monthly repayment rates,” added Hong.
Reference:
https://www.lightreading.com/huawei-apple-buck-q2-smartphone-trends—report/d/d-id/762886?
No stopping Huawei: 1st half 2020 revenues rose 13.1%, to $64.9 billion despite U.S. led boycott; ~60% of biz from China!
Huawei Technologies Co Ltd, the #1 telecom equipment company #2 smartphone maker, reported a 13.1% rise in revenue in the first half of the year, showing slower growth as U.S. officials continue to pressure the company’s suppliers and customers. Revenue rose to 454 billion yuan ($64.90 billion) in the first half of the year. ($1 = 6.9958 Chinese yuan renminbi or RMB). That was compared to 401.3 billion yuan revenues the year before. Huawei’s growth rate was down from 23.2% in the first half 2019. Huawei said net profit margins were 9.2%, up from 8.7% in the first half 2019.
FILE PHOTO: Huawei’s new flagship store is seen ahead of tomorrow’s official opening in Shanghai, following the coronavirus disease (COVID-19) outbreak, China June 23, 2020.
REUTERS/Aly Song/File Photo: REUTERS
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The results were published as Huawei fights a U.S.-led campaign to ban it from Europe’s 5G markets and choke off its supplies of components based on U.S. design expertise or manufacturing technology. Speculation has risen that UK authorities will this week move to exclude Huawei from the country’s 5G market just months after saying they would restrict it to 35% of any radio access or fiber broadband network.
The UK government previously thought such restrictions – combined with a ban on Huawei in the intelligent “core” of any network – would mitigate the risk and minimize disruption to service providers reliant on Huawei technology.
But security watch dogs are now worried the latest U.S. sanctions would heighten risks and potentially threaten Huawei’s ability to continue serving UK operators.
While other European governments and operators have similar concerns, Huawei has been able to rely on a 5G rollout in China for sales growth.
Victor Zhang, the company’s head of government affairs, told UK officials last week that Huawei will this year erect about half a million base stations for Mobile, Telecom and Unicom, China’s three national operators.
The company has referred to the scale of the Chinese deployment in refuting suggestions it may run out of components early next year. With the current 35% cap on its UK role, it needs components for only about 20,000 UK base stations, which it can easily supply through existing inventory, said a Huawei spokesperson.
A breakdown of the figures released today indicates growth in all three of Huawei’s business lines.
At the carrier division, which develops network products for communications service providers, sales were up 9%, to RMB159.6 billion ($22.8 billion), despite coronavirus-triggered lockdowns in some of Huawei’s most important markets.
While Huawei did not provide a regional breakdown of the numbers, a Chinese splurge on 5G equipment is likely to have fueled the increase given the pressure elsewhere.
Last year, the Chinese market accounted for nearly 60% of Huawei’s entire business, a figure that proves any European restrictions would have only a limited effect on the company.
Huawei’s relatively small enterprise business managed a 15% increase in sales, to RMB36.3 billion ($5.2 billion), while its device-making consumer business – which last year blamed U.S, sanctions for wiping about $10 billion off sales – said revenues were up 16%, to about RMB255.8 billion ($36.6 billion).
“Our business depends on delivering what our customers need,” said Zhang in a prepared statement about the latest numbers. “These results show that they continue to choose Huawei when they want reliability, security and value.”
Zhang said: “Our priority here is to build a better-connected UK where everyone can benefit from 5G and fiber broadband, no matter where they live.”
BT and Vodafone, the UK operators most heavily reliant on Huawei’s products, have told UK officials they need at least five years to phase out the Chinese vendor. Anything less and customers would face major disruption, including outages as equipment is replaced, said technology executives during a parliamentary committee last week.
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Huawei’s rise in sales comes after more than a year of pressure from American officials on the company’s suppliers and customers. The company sells 5G networking equipment to carriers and smart phones and laptops to consumers.
American officials placed Huawei on a blacklist in May of last year, restricting sales to the company of U.S.-made goods such as semiconductors. Huawei built up inventories and also continued to design its own chips and have them manufactured by Taiwan Semiconductor Manufacturing Co Ltd and others.
“Huawei has promised to continue fulfilling its obligations to customers and suppliers, and to survive, forge ahead, and contribute to the global digital economy and technological development, no matter what future challenges the company faces,” the company said in a statement on Monday.
In May, U.S. officials announced new rules aimed at constricting Huawei’s ability to self-supply chips, an ability that is critical to its efforts to sell 5G networking gear.
The first half results showed faster growth than Huawei’s first quarter results released in April. For the first quarter, revenues rose by about 1% to 182.2 billion yuan, versus 39% growth posted a year previous. Net profit margin in the first quarter narrowed to 7.3% from about 8% a year earlier.
Huawei did not report unit shipments of phones. Research firm IDC reported Huawei was the second largest phone maker in the first quarter of 2020, with 17.8% market share, behind No. 1 Samsung Electronics Co Ltd and ahead of No.3 Apple Inc.
References:
GreyB study: Huawei undisputed leader in 5G Standard Essential Patents (SEPs)
Market research firm GreyB cooperated with Amplified, which develops software for intellectual property research, to publish a “preliminary” report named ‘Who Owns Core 5G Patents? – A Detailed Analysis of 5G Standard Essential Patents (SEP)s.’ The stated aim of the project is ‘to bring greater transparency to the landscape of 5G standard essential patents.’
The caveat is that the data used for the study in this report is from March 2019 and its taken from the ETSI website, rather than ITU-R WP5D–IMT 2020 website. Note that 3GPP members declare IPR not to 3GPP (which is not a legal entity but is a collaborative activity between several SDOs), but to their regional standard bodies for which they are participating. Many of the 3GPP members are also ETSI members, so they declare their IPR to ETSI.
For info on 3GPP IPR handling: https://www.3gpp.org/about-3gpp/legal-matters
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From the report authors:
The report is the first of a series of collaborations between Amplified and GreyB that aim to bring greater transparency to the landscape of 5G standard essential patents. The data is large, opaque, and highly technical. Our focus will be on making the data involved more accessible and understandable. The issues are nuanced and complicated. We hope that this report and the following reports enable the many stakeholders involved to have more effective discussions and make better decisions.
Patents, which help protect the rights of the innovators who contribute to building the standard, may be declared as potentially essential and relevant to the standard. These are known as SEPs. Declaration does not require verification. Verifying that a patent is essential to a particular standard is a complex task
requiring significant time from experts in the field.
Importance of Standards:
Standards benefit businesses, policy makers, and society in general.
• They promote innovation in the market through rewarding R&D
• Help to commercialize the technology and bring products to market faster
• Ensure and define interoperability and interchangeability which gives manufacturers and consumers more choice
• Encourage improvement and competition in the market
• Help protect consumer safety
They balance cooperation and competition among innovative companies such that the net benefit is greater than the sum of their individual parts.
Manufacturers who implement standardized technology get an even playing field – a blueprint from which they can all build from at a predictable cost. This encourages more companies to participate in a market and innovate around the core technology.
Standards provide the ground rules for different devices, systems and processes to work together. Interoperable and interchangeable products gives consumers more choice and that encourages market pressure towards better, safer, and cheaper products.
Finally, standards provide policymakers with well-documented baselines and rules for implementation which helps them to understand the implications of new technology and take action to protect consumer, business, societal interests
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5G Patent Leaders:
The strong conclusion of the report is that Huawei is the 5G SEP leader, and not just by a little bit. As you can see in the chart below, Huawei accounts for 19% of core (used in 5G standards/3GPP specs) patents, followed by the two Korean tech giants, which are surprisingly ahead of Huawei’s main rivals in this case.
GreyB originally got in touch with Telecoms.com after reading an article there titled: 5G patent chest-beating is an unhelpful distraction. The purpose of the research is an attempt to cut through the noise created by various competing claims and get to the heart of the matter.
“5G is going to be next disruptive technology,” report co-author Muzammil Hassan of GreyB, told Telecoms.com. “And going by all the fuss around, it is important to know where each of the top contributors of 5G technology stand in terms of quality of innovation. Some may want to switch gears and file better inventions.”
One other metric GreyB was keen to flag up was ‘essentiality ratio,’ which seeks to illustrate the proportion of filed patents that make it into the core standard. Once more, in the chart below, Huawei comes top, but it should be noted that the ratio is derived from only those patents analyzed.
As a proportion of all declared patents Huawei is among the lowest at 13%, compared to the leader Nokia with 20%. Ericsson has the lowest ranks of all by this metric with 11%. The Sweden based company is also the lowest in SEPs with only 9%.
Problems and pitfalls:
Reviewing historical work done in this field we’ve identified the following pitfalls which we seek to avoid:
• Extrapolating conclusions done from a small sample size
• Using proxies from 4G and projecting those onto 5G
• Taking declared numbers at face-value
• Implicitly framing all patents as equal by focusing on patent quantity only without accounting for quality
The complex nature of patent data analysis simply makes it impossible to address these issues completely so unfortunately it may be impossible to avoid all of these in entirety. However, it is our goal to create a reliable report and therefore we believe it is critical to acknowledge and account for them transparently and to the best of our ability. Our methodology is detailed in the appendix and we invite corrections, additions, criticism, and contributions.
Patent Source and Study Methodology:
The data covered was all patents from the ETSI website 5G declaration list March 2019 version. This covers any patent or patent application declared to the ETSI 5G standard. Essentiality evaluation involves significant time and effort so there is a lag between release date of our report and data covered. We’ll issue updates as we continue to analyze the data.
• All patents declared to relevant 5G specifications and projects were selected resulting in 63,985 individual patent documents (granted patents, published patent applications, and non-public patent applications)
• ~500 Non-public patent documents, unavailable for inspection, were removed
• The remaining ~63,500 patent documents were grouped into 12,002 patent families.
• 6,402 of the 12,002 patent families with a granted patent having live legal status as of 31st December 2019 were kept, the rest were removed
• We determined our understanding of each of the 6,402 patent families by reading the claims and related embodiments from these granted patents and checked the correspondence history and documentation at the patent office to understand each patent.
• We determined essentiality for each patent family as a Core SEP or not by checking any specifications declared to be relevant by the patent holder to the SEP and compared the specific sections of these to compare overlap of the patent claims with those sections. If partial or no overlap was found, we then broadened our comparison to the wider group of all other specifications to repeat this process.
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References:
2021: Who Owns Core 5G Patents? – A Detailed Analysis of 5G SEPs
5G Patent Wars: Are Nokia’s 3,000 “5G” Patent Declarations Legit?
Strategy Analytics: Huawei 1st among top 5 contributors to 3GPP 5G specs
U.S. Commerce Dept NO-OP rule allows U.S. companies to work with Huawei on 5G & other standards
by Karen Freifeld (Reuters) with Opinion by Alan J Weissberger (does not reflect any IEEE position)
The U.S. Department of Commerce on Tuesday posted a new rule that allows U.S. companies to work with China’s Huawei to develop standards for 5G and other cutting-edge technologies, despite restrictions on doing business with the world’s top telecommunications equipment maker.
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Personal Opinion:
This new rule accomplishes NOTHING and may even backfire according to some analysts. First and foremost, the U.S. government has no authority to dictate whether or not U.S. companies are permitted to attend and contribute to international standards committee meetings that are attended by non-U.S. companies deemed to be a threat. It is up to each individual standards body to grant or deny membership to a company. Once that company becomes a member of the committee then NO GOVERNMENT ENTITY can block other companies from working with it on various standards.
Today (June 16th), a joint ITU-R WP5D contribution from Nokia Corporation, Telefon AB – LM Ericsson, Qualcomm, Inc., Samsung Electronics contribution asks WP5D to delete China and Korea IMT 2020 RIT submissions as they are technically identical to 3GPP’s IMT 2020 RIT submission.
Did the Korea government prevent Samsung (#1 company in Korea by far) from co-authoring that contribution, even though it is NOT in the best interest of Korea to have their national 5G (IMT 2020 RIT) standard withdrawn/deleted? Of course not, because they don’t have the authority to do that!
Separately, the U.S. government is dogmatic in destroying Huawei to end that company’s dominance of global telecom equipment, especially 5G where the U.S. wants to encourage (now non-existent) 5G equipment companies. The only U.S. 5G technology company we know of is Qualcomm. The others just do software for so called “Open RAN” (which can’t really be open if two companies have to spec out the radio and radio interface to the digital baseband unit).
“The United States will not cede leadership in global innovation,” said Wilbur Ross, the U.S. Secretary of Commerce, in his statement about the decision. “The Department is committed to protecting U.S. national security and foreign policy interests by encouraging US industry to fully engage and advocate for U.S. technologies to become international standards.”
Light Reading also take a negative view of the U.S. announcement. Iain Morris wrote in a blog post today (Bold font added for emphasis):
If the US is to remain a part of the global standards community, as it inevitably decided it would this week, the only way it can become less dependent on Chinese knowhow is to make the Chinese firms less influential in the standards groups. That could mean imitating China’s strategy of trying to shape the international standard and essentially crowd out the other players.
How successful that strategy has been is up for debate. Huawei undoubtedly plays a more prominent role in the 5G standard than it ever did in 3G or 4G. Yet critics believe the company’s influence has been overstated in the media. Its vast array of patents, they say, includes relatively few that are genuinely “standard-essential,” despite the findings of several studies that tout Huawei’s significance.
Richard Windsor, an analyst with Radio Free Mobile, thinks US semiconductor giant Qualcomm has “a much stronger position in 5G” than one high-profile study gives it credit for. The 3GPP, for its part, remains tight-lipped on this entire subject. Revelations could be awkward.
Whatever transpires in the world of standards, no one should seriously expect a rapprochement between the US and Huawei after all that has already happened. Meng Wanzhou, the Chinese firm’s chief financial officer (and daughter of its founder), remains under house arrest in Canada, awaiting possible extradition to the US to face charges of fraud. Countries including the UK are still under US pressure to ban Huawei from their 5G networks. And trade sanctions have not been eased.
Quite the opposite, in fact. A recent tightening-up of Commerce Department rules will stop Huawei from buying any components made with US technology. Previous restrictions covered only US components made on US soil, inflicting limited damage on Huawei and disappointing its US antagonists. Unable to procure equipment from important suppliers like Taiwan’s TSMC, Huawei could be finished within a year as a result of the latest measures, according to some analysts. If that happens, any concern about US firms working alongside their Chinese counterparts in standards groups would be largely academic.
People walk past a Huawei shop, amid an outbreak of the coronavirus disease (COVID-19), in Beijing, China, May 18, 2020. Photo Credit: REUTERS/Thomas Peter …………………………………………………………………………………………………………………………………………………
Reuters reported on Monday that the rule had been approved and sent to the Federal Register, the official U.S. publication for rules. It was posted for public inspection on the Federal Register’s website on Tuesday and is scheduled to be formally published on Thursday.
The rule amends the Huawei “entity listing,” which restricts sales of U.S. goods and technology to the company. The United States placed Huawei on the list in May 2019, citing national security concerns.
The amendment authorizes the release of certain technology to Huawei and its affiliates if it contributes “to the revision or development of a ‘standard’ in a ‘standards organization.’”
Industry and government officials have said the entity listing backfired in standards settings. With U.S. companies uncertain what technology they could share, some U.S. engineers did not engage, and Huawei gained a stronger voice, they said.
Huawei and 114 of its foreign affiliates on the Entity List “continue to participate in many important international standards organizations in which U.S. companies also participate,” the new rule says.
“As international standards serve as the building blocks for product development and help ensure functionality, interoperability and safety of the products, it is important to U.S. technological leadership that U.S. companies be able to work in these bodies in order to ensure that U.S. standards proposals are fully considered.”
Naomi Wilson of the Information Technology Industry Council, which represents tech companies, said the rule was a “long-awaited step to clarify that U.S. companies can participate in international standards bodies – even where certain listed entities are present.”
Boston lawyer Andy Updegrove, who has represented over 150 standards organizations, said he found one catch: Not all standards consortiums may meet the requirements in the rule.
To do so, he said, some may change the way they work, but other foreign ones may not. “Overall, it’s a big improvement, but it’s not going to help U.S. companies in every case,” Updegrove said.
Huawei said in a statement it wants to continue standards discussions with counterparts, including those in the United States, and that “inclusiveness and productive dialogue will better promote” their formulation and encourage development.
References:
ADDENDUM: The Dispatcher- Sept 2020:
After the U.S. Commerce Department last year put HUAWEI on a list of companies that it considered unsuitable for U.S companies and government—and the companies and governments of all its allies—to do business with, engineers in most U.S. technology companies stopped engaging with HUAWEI to develop standards. Since the standards train was going to go down the tracks with or without the U.S. on board, and Europe’s, Japan’s and the rest of the world’s companies were continuing to occupy their seats, the absence of U.S. engineers put the U.S. at a severe disadvantage, said QUALCOMM, Intel, AMAZON and many others. 10 HUAWEI had a louder voice at the table with the U.S. sitting outside.
“Confusion stemming from the May 2019 entity list had inadvertently sidelined U.S. companies from some technical standards conversations, putting them at a strategic disadvantage,” said a representative for the Information Technology Industry Council, a Washington, DC-based trade association that represents the companies making the complaint. After a year, the Commerce Department drafted a new rule which states that if HUAWEI is sitting at any standards table (not just 5G), the U.S. needs to be there. On June 15th, the rule was approved. In confirming the rule’s passing,
U.S. Commerce Secretary Wilbur Ross said:
“The United States will not cede leadership in global innovation. The department is committed to protecting U.S. national security and foreign policy interests by encouraging U.S. industry to fully engage and advocate for U.S. technologies to become international standards.”
U.S. Government Attempts to Strangle Huawei; China-U.S. Trade War likely to Accelerate into HYPER-DRIVE mode
On Friday, the U.S. government said it would impose export restrictions designed to cut off Chinese tech giant Huawei Technologies Co. from overseas suppliers, threatening to ignite a new round of U.S.-China trade tensions. The U.S. Commerce Department said its new sanctions would “narrowly and strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology.”
These new restrictions stop foreign semiconductor manufacturers whose operations use U.S. hardware, software and technology from shipping products to Huawei without first getting a license from U.S. officials, essentially giving the U.S. Commerce Department a veto over the kinds of technology that Huawei can use.
The restriction further tightens the U.S. export-control system’s existing rules related to Huawei. Washington alleges that Huawei gear could be used by Beijing to spy globally, which Huawei has repeatedly denied.
A logo of Huawei retail shop is seen through a handrail inside a commercial office building in Beijing.
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U.S. Commerce Secretary Wilbur Ross said Friday that Washington wants to prevent Huawei from evading sanctions imposed earlier on its use of American technology to design and produce semiconductors abroad. “There has been a very highly technical loophole through which Huawei has been able, in effect, to use U.S. technology with foreign fab producers,” Ross said in an interview on Fox Business Network. He said the changes announced Friday were tailored moves “to try to correct that loophole and make sure that the American fab foundries are competing on an equal footing with the foreign ones.”
Also on Friday, a senior administration official said there were “legal, human rights, and strategic rationales” for the actions against Huawei. Those included Huawei’s alleged theft of intellectual property and aid in developing surveillance technology and new weapon systems, the official said.
Under the new rules, the department can block the sale of semiconductors manufactured by Taiwan Semiconductor Manufacturing (TSMC) for Huawei’s HiSilicon subsidiary, which designs chips for the company, as well as chips and other software produced by manufacturing facilities in Taiwan, China and South Korea, which use American chip-making technology. The Commerce Department already had the ability to license software shipments from U.S.-based facilities.
Companies can apply for a license to continue supplying tech products to Huawei, but the administration said the presumption would be to deny those requests.
John Neuffer, the president of the Semiconductor Industry Association, which represents chip makers, said his group was concerned that the rule would “create uncertainty and disruption for the global semiconductor supply chain.” He added, however, that it appeared less damaging than broader approaches the administration had previously considered.
Huawei had no immediate comment.
China’s foreign ministry, in a statement, urged the U.S. to immediately halt “its unreasonable suppression against Huawei.”
“The U.S.’s practices not only harm the legitimate rights and interests of Chinese enterprises, but also do not accord with the interests of U.S. enterprises, and cause damage to the global industrial chain, supply chain and value chain,” it said.
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On Sunday, China’s commerce ministry said it will take “all necessary measures” in response to new U.S. restrictions on Chinese tech giant Huawei’s ability to use American technology, calling the measures an abuse of state power and a violation of market principles.
An unidentified spokesperson quoted Sunday in a statement on the China ministry’s website said the regulations also threatened the security of the “global industrial and supply chain.”
“The U.S. has utilized national power and used the so-called national security concern as an excuse, and abused export controls to continue to suppress some particular companies in other countries,” China’s commerce ministry said in today’s statement.
“China urges the U.S. to immediately cease its wrong actions,” the ministry added, calling the restrictions a “serious threat to global supply chains.”
China’s retaliation could take the form of restrictions on U.S. tech firms (Qualcomm, Apple. Intel, Nvidia, AMD, Broadcom, Cisco, even Boeing) selling their products in China.
Victor Gao, vice-president of the Centre for China and Globalisation, a Beijing-based think tank, said there were many ways in which China could retaliate for the new restrictions on Huawei, including selling its huge holdings of U.S. treasury bonds or halting any future purchases, and tightening its controls on Apple products.
“For example, if Beijing declared that all Apple products made in China had to be inspected, which would delay their shipment, in three months, Apple would be dead,” he said.
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China’s state-run newspaper reported on Sunday that the Chinese government was ready to retaliate against the U.S.. The source, who is described as close to China’s government, told the state-run Global Times that China was planning countermeasures, such as “imposing restrictions” against U.S. companies like Apple, Cisco, and Qualcomm. The source also suggested the possibility of China halting Boeing airplane purchases.
“China will take forceful countermeasures to protect its own legitimate rights” if the Trump administration goes ahead with the plan to block essential suppliers of semiconductors from selling those components to Huawei.
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Backgrounder:
U.S. government officials have repeatedly accused Huawei of stealing American trade secrets and aiding China’s espionage efforts, ramping up tensions with the rival superpower while both sides were involved in a long-simmering trade war.
As a result, Huawei has increasingly relied on domestically manufactured technology, but the latest rules will also ban foreign firms that use US technology from make semiconductors to Huawei without US permission. The new restrictions will cut off Huawei’s access to one of its major suppliers of semiconductors- Taiwanese chipmaker TSMC (world’s largest silicon foundry).
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May 18th UPDATE:
Huawei on Monday assailed the latest U.S. move to cut it off from semiconductor suppliers as a “pernicious” attack that will put the Chinese technology giant in “survival” mode and sow chaos in the global technology sector.
“The decision was arbitrary and pernicious and threatens to undermine the entire (technology) industry worldwide. This new rule will impact the expansion, maintenance, and continuous operations of networks worth hundreds of billions of dollars that we have rolled out in more than 170 countries,” Huawei said in a statement.
The ban also went against the US government’s claim that it is motivated by network security, the company said.
“The US is leveraging its own technological strengths to crush companies outside its own borders. This will only serve to undermine the trust international companies place in US technology and supply chains. Ultimately, this will harm US interests,” said Huawei.
https://www.globaltimes.cn/content/1188683.shtml
References:
https://www.wsj.com/articles/u-s-moves-to-cut-off-chip-supplies-to-huawei-11589545335
https://abcnews.go.com/US/wireStory/china-warns-us-measures-huawei-rules-70728162
http://www.globaltimes.cn/content/1188491.shtml
U.S. government in talks with Intel, TSMC to develop chip ‘self-sufficiency’
The coronavirus pandemic has underscored longstanding concern by U.S. officials and executives about protecting global supply chains from disruption. Administration officials say they are particularly concerned about reliance on Taiwan, the self-governing island China claims as its own, and the home of Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chip manufacturer and one of only three companies capable of making the fastest, most-cutting-edge chips (the two other foundries are Samsung and Intel).
Officials from the U.S. government are in talks with Intel and Taiwan Semiconductor Manufacturing to build chip factories in the U.S., the Wall Street Journal reported, citing sources familiar with the matter. The U.S. government believes the pandemic showed how reliant the U.S. is on Asian factories and it now wants to promote more tech self-sufficiency.
“The administration is committed to ensuring continued U.S. technological leadership,” a senior official said in a statement. “The U.S. government continues to coordinate with state, local and private-sector partners as well as our allies and partners abroad, to collaborate on research and development, manufacturing, supply-chain management, and workforce development opportunities.”
HiSilicon, owned by Huawei, is a fabless semiconductor company which doesn’t have its own manufacturing plant. It relies on foundry companies like Taiwan Semiconductor Manufacturing Co. to make its chips. The Trump administration is preparing rules that could restrict TSMC’s sales to HiSilicon. Huawei may be storing up chip inventories in anticipation of such tighter restrictions. Huawei may shift some of its orders to Chinese foundry Semiconductor Manufacturing International Corp. (SMIC), but technology there still lags behind industry leaders like TSMC and Samsung.
Ultimately SMIC’s capabilities could be hampered if the Trump administration decides to dial up the pressure in its campaign against China. The Commerce Department said last week that it would expand the list of U.S.-made products and technology shipped to China that need to be reviewed by national security experts before shipping. SMIC depends on foreign semiconductor manufacturing equipment, including some from the U.S.
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Intel VP of policy and tech affairs Greg Slater said Intel’s plan would be to operate a plant that could provide advanced chips securely for both the government and other customers. “We think it’s a good opportunity,” he added. “The timing is better and the demand for this is greater than it has been in the past, even from the commercial side.”
Intel Chief executive Bob Swan sent a letter to Defense Department officials on 28 April, saying the company was ready to build a commercial foundry in partnership with the Pentagon. Strengthening U.S. domestic production and ensuring technological leadership is “more important than ever, given the uncertainty created by the current geopolitical environment,” Swan wrote in the letter. “We currently think it is in the best interest of the U.S. and of Intel to explore how Intel could operate a commercial U.S. foundry to supply a broad range of microelectronics,” the letter said. The letter was then sent to Senate Armed Services Committee staffers, calling the proposal an “interesting and intriguing option” for a U.S. company to lead an “on-shore, commercial, state of the art” chip foundry.
TSMC has been in talks with people at the Commerce and Defense departments as well as with Apple, one of its largest customers, about building a chip factory in the U.S., other sources said. In a statement, TSMC said it is open to building an overseas plant and was evaluating all suitable locations, including the US. “But there is no concrete plan yet,” the company said.
Some U.S. officials are also interested in having Samsung, which already operates a chip factory in Austin, Texas, expand its contract-manufacturing operations in the U.S. to produce more advanced chips, more sources said.
A trainee at a facility of the U.S. chip maker GlobalFoundries in Germany last year. The U.S. is looking to strengthen its own production of semiconductors. PHOTO: SEBASTIAN KAHNERT/DPA/ZUMA PRESS
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Taiwan, China and South Korea “represent a triad of dependency for the entire US digital economy,” said a 2019 Pentagon report on national-security considerations regarding the supply chain for microelectronics. The US has dozens many semiconductor factories, but only Intel’s are capable of making the chips with transistors of 10 nanometers or smaller. The company however mostly produces for its own products. Among companies that make chips on contract for other companies, only TSMC and Samsung make those high-performing chips. Many US chip companies such as Qualcomm, Nvidia, Broadcom, Xilinkx and Advanced Micro Devices rely on TSMC for the manufacture of their most advanced products. Intel also makes chips with TSMC, according to TSMC’s 2019 annual report.
The Semiconductor Industry Association is conducting its own study on domestic chip production. The report is expected to recommend the US government set up a billion-dollar fund to push domestic chip investment, another source said. Another proposal by SEMI, an industry group representing semiconductor manufacturing equipment makers, involves giving tax credits to chip makers when they purchase and install equipment at factories in the US.
The Commerce Department is also considering a rule aimed at cutting off Huawei’s ability to manufacture chips at TSMC (see Addendum below). President Donald Trump has approved the move, but Commerce Department officials are still working through preliminary drafts, sources said.
May 16, 2020 Addendum: U.S. Moves to Cut Off Chip Supplies to Huawei
References:
China Mobile and Huawei deploy 5G base station at 6,500m on Mt Everest!
China Mobile and Huawei have together built the highest elevation 5G (or any other) base station on this planet– at 6500 meters (21,300 feet) at Mount Everest where there are no roads or trails. [Note that the summit is 8,848 meters, but will be measured again this year].
The base station along with two others at lower elevations, will enable China Mobile to run its 5G wireless network on the world’s highest mountain. It will surely be a great aid to climbers which had to previously use satellite phones for ultra high altitude communications with their high camps.
Zhou Min, general manager of Tibet branch of China Mobile, said the facility will ensure reliable telecommunication for the activities of mountain climbing, scientific research, environmental monitoring and high-definition live streaming. The building of 5G infrastructure is in tandem with the measuring of the height of the peak, which officially started on Thursday.
“It comes on the 60th anniversary of the first successful ascent of Mount Everest from the northern slope and the 45th anniversary of China’s first official accurate measurement of Mount Everest,” declared the press release. “Significantly, the 5G network on Mount Everest will provide communication services for the 2020 Mount Everest re-measurement.”
The base station launch marks the 60th anniversary of the first successful ascension of Mount Everest from the northern slope. Base stations are now at the Mount Everest Base Camp at 5,300 metres, the Transition Camp at 5,800 metres, and the Forward Camp at 6,500 meters.
A China Mobile technician told state media that the new 5G network is fast enough for climbers and scientists to have 4K and VR live streaming on the mountain.
Huawei’s 5G AAU and SPN technologies were applied at the base stations, managed and maintained by a dozen network specialists stationed there 24/7 at altitudes of 5,300 meters and above.
Huawei claims that its 5G AAU is highly integrated into a compact size, making it easy for deployment and installation and it fits particularly well for infrastructure in extreme environments such as Mount Everest. In this project, a network in the “stand-alone plus non-stand alone” (SA+NSA) mode connects five 5G base stations.Meanwhile, the 5G connectivity is achieved by Huawei’s Massive MIMO technology.
Huawei’s Massive MIMO comes with three-dimensional narrow beams. At an altitude of 5,300 meters, the 5G download speed exceeded 1.66 Gbps, where the upload speed tops 215 Mbps, claims Huawei. Some of the other technologies being employed by the Chinese telecom equipment giant are Intelligent OptiX Network and HoloSens intelligent video surveillance system. The 5G base station at Everest base camp includes a Gigabit ONT, Huawei’s 10G PON OLT and 200G ultra-high-speed transmission platform, and the HoloSens intelligent video surveillance system.
Pictures of 5G Base station at 6500 meters Photo credits: Huawei
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The press release concluded as follows:
Huawei strongly believes that technology means to make the world better. The beauty of Mount Everest can be displayed via 5G high-definition video and VR experience, which also provides further insights for mountaineers, scientists and other specialists into the nature. The ground-breaking establishment on Mount Everest once again proves that 5G technology connect mankind and the Earth harmoniously.
References:
https://www.huawei.com/en/press-events/news/2020/4/china-mobile-huawei-deliver-world-highest-5g
https://www.bloombergquint.com/technology/5g-signal-now-available-on-mount-everest-peak
Huawei’s “resilient” Q1-2020 results and coronavirus commentary
Undaunted by the U.S. campaign to ban its network equipment and smart phones, Huawei reported results for the first quarter 2020 that were in line with expectations, despite the effects of the coronavirus pandemic. The company said its business is continuing to grow, albeit at a slower pace.
Revenue in the first quarter rose by about 1% to 182.2 billion yuan ($25.72 billion), vemart phones, China tech giant rsus a 39% growth posted a year ago. Its net profit margin over the period narrowed to 7.3% from about 8% a year ago. Huawei being a privately owned company did not disclose its net profits.
“The growth rate has slowed, but this is also a resilient performance in the face of both the entity list and the coronavirus we are facing at this moment,” Vice President Victor Zhang said in a statement on Tuesday.
This represents a significant slowdown from the 19 percent sales growth for 2019. The company earlier stated that 2020 would be a very difficult year, its first full year with U.S. sanctions. Along with the effects of the coronavirus outbreak, 2020 “will be the most difficult year” for Huawei, rotating chairman Eric Xu said.
As for the impact from the coronavirus pandemic, Zhang said it was difficult to gauge what that would be in the short or long term, as he presented the results from London rather than Huawei’s Shenzen base to mark 20 years of business in Europe.
The company provided enlightening comments on the coronavirus in its earlier referenced statement:
Networks are a lifeline for people from all walks of life during this public health crisis, so ensuring normal network operations is of paramount importance. Huawei is doing everything in its capabilities to help carriers ensure stable and secure network operations. Together, we are working to meet the network demand created by social distancing as people switch to telecommuting, distance education, and e-commerce for daily necessities.
Since the outbreak, Huawei and its partners have rapidly launched many 5G- and AI-powered medical applications. We are using our expertise in communications technologies to help fight the pandemic and save more lives. The AI-assisted coronavirus diagnosis solution cuts CT scan review times from 12 minutes down to 2, helping doctors improve their diagnostic efficiency. 5G-enabled remote video consultation helps mitigate shortages of frontline experts and increases the efficiency of diagnosis and treatment of critical patients. AI-powered thermal imaging devices can take temperatures, increasing the efficiency of infection prevention and control in public places. In addition, Huawei has been doing its best to get masks, test kits, and other protective supplies to the countries and organizations that need them.
A seed that survives the storm will sprout and then blossom. Even though it is impossible to know when the tides of this pandemic will turn, we at Huawei believe that this challenge will be overcome by standing together.
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In March, Huawei reported financial results for 2019, recording a $12 billion revenue shortfall that it attributed to the entity listing, which effectively blacklisted Huawei and numerous affiliates by restricting sales of certain products from U.S. suppliers to the vendor.
Huawei’s consumer segment was particularly hit by the U.S restrictions in the second half of last year. As one of the world’s largest smartphone makers, Huawei was unable to access Google’s proprietary Android operating system and was forced to launch new devices without access to the popular Google Play store.
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References:
https://www.huawei.com/en/press-events/news/2020/4/huawei-announces-q1-2020-business-results
Huawei confirms position as #1 5G network equipment vendor with 10 key enablers for 5G
Huawei Technologies Co has secured its position as the most sought-after 5G telecom equipment supplier, despite the US government‘s intensified push to contain the Chinese technology giant on the geopolitical, legal and technological front lines. Among the 91 commercial 5G contracts Huawei has inked, the largest number by any telecom gear maker so far, more than half are from Europe, where Washington has spared no effort to dissuade its allies from using the company in their 5G systems.
Analysts said the steadily growing contracts show that Huawei has won the trust of more foreign telecom operators with its technological prowess, and Washington’s groundless security accusations have failed to convince even some of its closest allies.
Ding Yun, president of Huawei’s carrier business group, said at a launch event in London on February 20th that the company’s 91 commercial 5G contracts is an increase of nearly 30 from last year. That is ahead of the 81 announced by Swedish telecom company Ericsson last week and well ahead of Nokia, which said it had secured 67 5G commercial deals as of Feb 10th. Ding said 47 of its 5G contracts are from Europe, 27 from Asia and 17 from other regions. Huawei will invest $20 million in innovative 5G applications over the next five years, contributing to a thriving 5G ecosystem and accelerating the commercial success of 5G, officials said.
At the same event that day, Yang Chaobin, President of Huawei 5G Product Line (see photo below), unveiled Huawei’s 10 key enablers for 5G. Those are the following:
- #1 Extensive 5G Commercial Experience to Accelerate 5G Scale Deployment
- #2 Comprehensive Portfolios to Provide Consistent 5G Ultimate Experience.
- #3 Industry’s Only Ultra-Broadband Solution, Simplifying Network Deployment.
- #4 Exclusive Blade AAU, All in One for Simplified Deployment.
- #5 Industry’s First Commercial DSS Solution, Enabling Fast FDD 5G NR Deployment
- #6 Cutting-Edge Algorithm Enables Leading Network Performance
- #7 Low Energy Consumption Makes Green 5G
- #8: E2E NSA/SA Converged Solution for Future Industry Digitalization
- #9 Unique E2E SUL to Unlock UL Experience and Latency for Industry Needs
- #10 E2E Network Slicing Solution Facilitates Industry Digitalization
Yang Chaobin Unveils Huawei 5G 10 Key Enablers in London
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Mr. Yang Chaobin said, “In the process of mobile communications development, telecom operators have been using greater numbers of antenna units as a solution for insufficient sites and poles. Now they have to deal with insufficient antenna installation space. Huawei’s unique Blade AAU, which prides itself on “ultimate simplicity,” aims to reduce operators’ TCO and investment in hardware and sites.”
According to the latest GSA update, by the end of 2019, 62 telecom operators in 34 countries had officially announced the commercial release of 5G, and 41 of them are supported by Huawei, accounting for two-thirds of the total figure.
In the 5G era, continuous large-bandwidth TDD spectrum is the optimum choice for achieving an ultimate 5G experience. However, a significant number of telecom operators only get discontinuous segments of spectrum due to satellite occupation or discrete allocation. Huawei has launched the industry’s only full series of ultra-broadband solutions, which support a maximum bandwidth of 400 MHz. With just one module, all discrete spectrum within 400 MHz can be used. It saves modules and simplifies site deployment, greatly slashing site rental and hardware cost for telecom operators.
2020 will see large-scale 5G deployment worldwide. Apart from the mainstream 5G deployment on mid-band spectrums, operators can also deploy 5G networks on sub-3 GHz FDD to achieve fast 5G coverage. For new FDD spectrum, Huawei’s suggestion is direct 5G deployment on them to significantly improve the FDD spectral efficiency with NR technologies. It is proven that NR operating at an FDD frequency can deliver an impressive improvement in user experience compared to that of LTE.
For existing FDD spectrum, Huawei’s 1 ms dynamic spectrum sharing (DSS) solution can be adopted. This technology dynamically allocates spectrum resources in milliseconds based on LTE and 5G service and traffic requirements, maximizing spectral efficiency. “In November 2019, Huawei DSS was put into commercial use in Europe. Until now, our customers have 100 million legacy FDD RRUs that can be adapted efficiently to 5G using this solution,” said Yang Chaobin.
“Huawei has undergone extensive R&D, innovation, and commercial adoption in Massive MIMO. We have the most complete product portfolios and state-of-the-art algorithms to keep our Massive MIMO performance unrivalled. In terms of software algorithms, Huawei has MU-MIMO, SRS, full-channel beamforming and more to provide optimal capacity, coverage and user experiences. In 2019, Huawei helped LG U+ in South Korea, EE in the UK, and Sunrise in Switzerland to deploy 5G commercial networks.
In the third-party network performance tests conducted by RootMetrics and Connect, Huawei helped its operators rank No.1 in user experience, with an average downlink rate of 1.5 to 2 times higher than that of competitors’ networks, which further demonstrates Huawei’s superior Massive MIMO performance in actual commercial use,” according to Yang Chaobin.
“Every new generation of mobile communications technologies is developed to offer more applications and a better experience. 5G is no exception. 5G coverage must be good enough to provide excellent experience, and 5G experience must be better than any of the previous generations. Huawei’s products and solutions are committed to carrying forward this mission. 2020 will be a key year for 5G to be put into commercial use on a larger scale. “No one can whistle a symphony, it takes an orchestra to play it.” We hope to work with global partners to continuously carry out technology and application innovations, which utilize 5G as the connection platform, together with AI and Cloud technologies, to jointly build a healthy, viable, and sustainable digital ecosystem,” said Yang Chaobin.
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Geo-Political Backdrop for Huawei:
The UK announced on Jan 28 that it would allow Huawei in the noncore part of its 5G network, with a cap of 35 percent market share. A day later, the EU announced its toolbox for 5G deployment, which does not ban Huawei and leaves it up to the member countries to make their final decisions.
French Minister of Economy and Finance Bruno Le Maire confirmed that the government will not exclude Huawei. The same view was expressed by Swedish and Italian officials, though those countries also said there would be security reviews for vendors.
Bai Ming, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, said more European countries are taking an unbiased approach toward Huawei because Washington has never provided factual evidence to support its security accusations. “Challenges only make Huawei stronger,” Wang said.
“More people realized that mixing politics with normal business cooperation could only delay the global deployment of 5G,” Bai said.
But analysts also warned that tougher headwinds are still ahead for the world’s largest telecom equipment maker, given media reports that the US government is planning to further restrict US technology sales to Huawei.
Meanwhile, a federal judge in Texas on Tuesday dismissed a lawsuit filed by Huawei to challenge a 2018 congressional defense bill that stopped federal agencies from doing business with the company.
Wang Yanhui, secretary-general of the Mobile China Alliance, said a broader US ban on technology sales won’t substantially harm Huawei’s telecom business, as it has already shipped US-component-free 5G base stations around the world.
The Shenzhen-based company has also been scrambling to build its own mobile software ecosystem, the foundation for its ability to continue selling smartphones in overseas markets to mitigate the fallout from US restrictions.
References:
https://www.prnewswire.com/news-releases/huawei-unveils-10-key-enablers-for-accelerating-global-commercial-adoption-of-5g-301009039.html
U.S. government & tech companies to create software standards for 5G telecommunications networks
The White House wants U.S. tech firms to collaborate on one or more 5G infrastructure software standard(s). The plan would build on efforts by some U.S. telecom and technology companies to agree on common engineering standards that would allow 5G software developers to run code on machines that come from nearly any hardware manufacturer.
That would reduce, if not eliminate, reliance on Huawei equipment.according to Larry Kudlow, Director of the National Economic Council. That would reduce, if not eliminate, reliance on Huawei equipment. The U.S. contends Huawei has strong links to the Chinese military, making use of its equipment a national-security risk. Huawei has denied such links and says it operates independently of the Chinese government.
“The big-picture concept is to have all of the U.S. 5G architecture and infrastructure done by American firms, principally [1],” Larry Kudlow said in an interview with the Wall Street Journal. “That also could include Nokia and Ericsson because they have big U.S. presences.”
Note 1.: That is highly unlikely to happen, because there are ZERO U.S. firms producing 5G infrastructure. The only non-Asian 5G infrastructure equipment makers are Nokia and Ericsson- both headquartered in Europe. 5G network operators AT&T and Verizon are working with Cloud Service Providers, Microsoft and Amazon, respectively on integration of mobile edge computing with their 5G networks.
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AT&T, Microsoft and Dell [2] are among the companies working with the administration on the project. “Dell and Microsoft are now moving very rapidly to develop software and cloud capabilities that will, in fact, replace a lot of the equipment,” Mr. Kudlow said. “To quote Michael Dell, ‘Software is eating the hardware in 5G.’
Note 2.: None of those companies are now or will in the future make 5G infrastructure. AT&T is a network operator that purchases 5G infrastructure equipment, Microsoft is primarily a Cloud Service Provider (AZURE), while Dell is an IT infrastructure company that primarily sells to enterprise data center customers.
Kudlow is likely referring to virtualization of the 5G radio access and 5G core networks when he mentioned “software and cloud capabilities that will, in fact, replace a lot of the equipment.” Yet there’s already a lot of work that’s been done in vRAN and cloud RAN (sometimes referred to as “cloud native radio access networks.”
For open source cellular hardware, there is an OpenRAN project within the O-RAN Alliance, which involves disaggregating a cellular Base Station into its constituent components and defining interfaces between those. The Open Network Foundation (ONF) is collaborating with the O-RAN Alliance to generate open source software for that project. There are also several RAN projects within the Telecom Infrastructure Project (TIP), including OpenRAN, vRAN Fronthaul and OpenRAN 5G NR Base Station.
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White House officials say they are taking the effort seriously because of the potential value of 5G technology to the broader economy. Industry boosters say the new 5G engineering standard will power an “Internet of Things” in which factories, household appliances and vehicles are connected in the way mobile phones are now. They say 5G can do for future tech startups what 4G technology did for smartphone apps like Uber Technologies Inc. and Snapchat Inc., building a foundation for future innovation.
“Talk is a good start,” said Roger Entner, an analyst for industry researcher Recon Analytics. “But in the end it needs action. More funding will accelerate everything.”
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Similar U.S. government initiatives and proposals:
The effort appears to line up very closely with a new program at the U.S. military’s Defense Advanced Research Projects Agency (DARPA) called “Open Programmable Secure 5G” (OPS-5G). As noted by Data Centre Dynamics, the program promises to “create open source software and systems enabling secure 5G and subsequent mobile networks such as 6G. The signature security advantage of open source software is increased code visibility, meaning that code can be examined, analyzed and audited, either manually or with automated tools. In addition, the portability of open source serves, as a desired side-effect, to decouple the hardware and software ecosystems. This significantly raises the difficulty of a supply-chain attack and eases the introduction of innovative hardware into the market.”
U.S. lawmakers have proposed funding research and development into open 5G software standards. A bipartisan group of senators in January proposed tapping proceeds from the Federal Communications Commission’s coming spectrum license auctions to pay for research grants into those technologies. The administration is looking into those efforts but hasn’t yet decided whether to back them, Mr. Kudlow said.
If U.S. and European companies work separately, it could take longer to develop world-beating technology. If they work together, it could raise antitrust concerns. However, Kudlow said he didn’t believe antitrust would be an issue, saying the companies would compete in providing 5G technology. “We’re taking a coordinating role among leading companies,” he said.
He didn’t provide a specific time frame, though others in the government have said they expect to have a system running within 18 months. Earlier, the White House considered subsidizing a new hardware competitor to Huawei or backing a government-owned 5G network but rejected both.
President Trump is squarely behind the effort, said Kudlow, who is leading the initiative as director of the National Economic Council.
“The president kept saying to me, ‘Can’t we just put it (5G) under one simple infrastructure?’” Kudlow said. “We’re trying to create an American soup-to-nuts infrastructure for 5G. He kept hearing that Huawei seems to be able to do it.”
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Huawei’s threat to U.S. and European tech companies:
Paul Triolo, head of global technology policy at the Eurasia Group, a business consulting firm agreed that Huawei has a formidable lead in 5G technology. “The problem is you’re starting late in the game to fix this problem,” Mr. Triolo said of the U.S. effort. He added that the initiative could also threaten Nokia and Ericsson by making their machines into commodities, Mr. Triolo said.
Perhaps the most insightful proceeding on Huawei and the Chinese threat to 5G in the US is playing out at the FCC, the US government agency charged with oversight of telecom networks. That agency is considering a proposal that would bar the purchase of Huawei equipment among US companies that receive government subsidies for network buildouts in rural areas. The FCC is also evaluating its own rip-and-replace program of existing Huawei equipment in US networks.
However, unlike some of the other Trump administration efforts against Huawei, the FCC’s proceeding is being held in the open, with publicly available comments from all the companies involved in the issue.
Huawei is the world’s largest supplier of wireless networking equipment, yet it generates less than 1% of its revenue from the US market, according to research and consulting firm GlobalData.
Huawei has denied any links to Beijing, but the Chinese government is largely responsible for Huawei’s success due to the immense funding it funneled to the company and the measures it took to block competitors from impeding Huawei’s rise in the China market. As a result, Huawei became a telecom juggernaut not just in China, but all over the world. Now, the US is trying to adopt a similar strategy to promote US firms, and it wants to do so ahead of more widespread rollout of next-gen 5G networks in the coming years.
“If the US wants 5G hardware and software developed by a US or European company, the government should encourage companies to begin negotiations with Huawei to license our 5G technology,” Huawei’s US security lead Andy Purdy told the WSJ. Purdy says that Huawei’s intellectual property is integral to fast 5G deployment, and that without it, “the combined product will be one to two years behind the comparable Huawei products in terms of functionality and assurance.”
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References:
https://www.wsj.com/articles/u-s-pushing-effort-to-develop-5g-alternative-to-huawei-11580831592