US May Decide to Cut Off Huawei Technologies from All American Suppliers

UTC by Bhushan Akolkar · 3 min read
US May Decide to Cut Off Huawei Technologies from All American Suppliers
Photo: Depositphotos

Sources familiar with the matter said that the Biden administration is considering a total ban on supplies by the US firms to Huawei.

In the latest development, the Biden administration has decided to cut off Huawei Technologies from all of its American suppliers. This development comes as the US government seeks to tighten its grip on Chinese tech companies. It also means that US companies like Qualcomm and Intel won’t get further licensing approval to export most items to Huawei.

Since the last four years during former President Donald Trump‘s administration, sales from US firms to Huawei have been limited. As a result, US suppliers have been required to seek government approval to sell any equipment to Huawei.

Sources familiar with the matter said that officials in the Biden administration are considering the ban on all supplies to Huawei. For a long, Huawei has been suspected of ties to the Beijing government as well as the Chinese military.

Even during Joe Biden‘s presidency, tensions with China have been throughout on the rise. He’s also facing pressure from Republicans, who are currently controlling the House, to limit the country’s technological advances to Beijing. Recently, the Biden administration also persuaded Japan and the Netherlands to join the US in limiting the exports of manufacturing equipment and semiconductors to China.

Huawei, the $100 billion Chinese behemoth, is willing to aggressively expand the world’s largest 5G network at home. Besides, it’s also aiding the construction of critical broadband in Africa and the Middle East. Last month in December, Huawei said that it’s “business as usual” for the company after successfully weathering US tech sanctions.

Stalling Huawei Supplies

Sources said that some officials have advocated the new policy wherein all licensing requests to supply the company would be denied. Also, the current applications for new licensing are languishing in a stalled approval process.

Currently, US companies like Advanced Micro Devices and Intel provide Huawei processors required in laptops. Similarly, Qualcomm provides the modems and processors required for Huawei smartphones.

It’s unclear what shall be the long-term impact of these actions on Huawei. The company still derives a very large chunk of its revenue from local wireless carriers such as China Mobile Ltd. currently, China has more than 2 million 5G base stations. As per industry officials, this is more than 60% of the world’s total.

Also, the policy changes are just under consideration. It’s not clear how soon will the administration bring these changes. The discussions are still at an early stage and the decision is likely to arrive by May this year.

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