The U.S. government decided to temporarily ease trade restrictions imposed last week on China’s Huawei. From the government, they’ve said that, with these measures, they are aiming to minimize disruption for its customers.
However, these were dismissed by Huawei’s founder who said the tech firm had prepared for U.S. action.
Just for reminder, this world’s largest telecommunications equipment maker is still prohibited from buying American parts and components to manufacture new products without license approvals that probably would be denied anyway. The U.S. government said it imposed the restrictions because of Huawei’s involvement in activities contrary to national security or foreign policy interests.
Google May Be Thinking This Over
After Donald Trump blacklisted Huawei, Google also announced to cut ties and dump from its list of Android partners. It means that the Huawei smartphones won’t be getting any further official updates from Android. Moreover, the step also bars the Chinese tech giant from hosting any Google Play mobile apps like Gmail and YouTube.
From Google, they explained, that owners of Huawei phones will retain their access to the Play Store and continue being able to update their apps. The big thing that’s being written out of their future, however, are further Android OS updates from Google. To get these updates, all it’s left to Huawei phone owners and fans, is to hope for a resolution in the US-China trade dispute.
However, yesterday, the U.S. Secretary of Commerce Wilbur Ross said that the new authorization is intended to give telecommunications operators that rely on Huawei equipment time to make other arrangements.
“In short, this license will allow operations to continue for existing Huawei mobile phone users and rural broadband networks.”
Huawei founder Ren Zhengfei said they don’t need any charity and added:
“We sacrificed [the interests of] individuals and families for the sake of an ideal, to stand at the top of the world. For this ideal, there will be conflict with the United States sooner or later.
The temporary reprieve move bore little meaning for the company as we had been making preparations for such a scenario. The U.S. government’s actions at the moment underestimate our capabilities.”
Huawei “Thankful” to US Companies but Also Well Prepared for the Years to Come
In fact, Huawei was at odds with the U.S. government, not U.S. firms, and that Huawei is capable of making the chips it buys from the United States though that does not mean it will stop buying American chips.
However, Ren didn’t forget to add that Huawei is “very grateful” to American companies, who have contributed a lot to Huawei. Many of Huawei’s consultants are from American companies such as IBM.
Asked how long the crisis will last for Huawei, Ren said the question should be directed at Trump instead. He said:
“Blame should be directed at US politicians, not companies.”.
Huawei’s wholly owned semiconductor unit HiSilicon, which produces chips for smartphones and servers for the company, has prepared for years to cope with a scenario like the US cutting off access to advanced chips and technology, HiSilicon’s president Teresa He Tingbo wrote in a memo following the restrictions last week.
Huawei’s smartphone unit head Richard Yu Chengdong also confirmed in March that the company has developed its own operating systems (OS) for smartphones and computers in case those provided by US technology firms are no longer available.
Stock Market Update
Shares in Huawei’s competitor Samsung were up almost 6 percent and were trading up 3.7 percent at $36.50. Chipmaker stocks fell broadly. Nvidia and Advanced Micro Devices both fell about 3% and Qualcomm slid 6%. Apple added to the market’s decline, sliding more than 3%.
Broadcom stock fell more than 5% and shares of NeoPhotonics, a San Jose, Calif.-based networking modules manufacturer, plunged more than 30% following the ban. Alphabet (GOOGL) was falling more than 2 percent.
Intel INTC, +1.01% will lose some business from Huawei but the loss is not significant. Perhaps this is the reason that smart money flows in Intel stock stayed mildly positive.