Top US tech companies have begun to implement the Trump administration’s order to stop selling American-made tech products to Huawei, a Chinese company. Huawei is the largest smartphone brand in the world after Samsung. The company relies on major US companies for hardware and software for its smartphone and other network technologies.
Just last week, the Trump administration accused Huawei of being used by the Chinese government to spy on the United States. Huawei denied the allegations but the US Commerce Department still went ahead to blacklist the company and ordered US manufacturers of tech components to stop selling to the Chinese company.
Huawei is the largest technology company in China and this move may cripple its business around the world with far-reaching consequences for the modern economy.
Huawei’s Inability to Access Google’s Android OS Will Curtail Sales of Its Smartphones Abroad
Several US tech organizations have indicated their willingness to obey the Trump order and quit supplying tech components and software to Huawei. Intel Corp supplies server chips to Huawei, Qualcomm supplies it with smartphone processors and modems, Xilinx supplies programmable chips for networking, and Broadcom supplies switching chips for networking machinery.
All these and other suppliers of semiconductors to Huawei have indicated quiting business with the Chinese company.
Alphabet, Google’s parent company, has also indicated they will Huawei’s access to their proprietary Android mobile operating system for smartphones and other major Google services.
Due this restriction, Huawei will only be able to use the public version of Google’s Android OS. The Chinese company will not be able to provide specialized Android apps and services such as Google Maps and Gmail among others on its smartphones.
This will surely choke the sale of Huawei smartphones in international markets and restrict several major services that consumers are familiar with.
US’ Trade Restrictions with Huawei May Snowball into a Cold War with China
An analyst with Rosenblatt Securities Inc., Ryan Koontz, noted with concern that Huawei is “heavily dependent on US semiconductor products” and that its business operations will be seriously crippled without access to major US components.
Furthermore, the order may induce China to delay the launch of its 5G wireless network worldwide. Meanwhile, several US tech companies will also be affected by not selling to Huawei and among these is Micron Technology.
Insiders reveal that Huawei anticipated this move from the Trump administration and began hoarding mobile chips since mid-last year. It is even said that the company is designing its own chips with a view to cutting down reliance on US suppliers.
However, inside sources who do not desire to be named since they are not authorized to speak on the matter stated that Huawei’s stockpile may run out in less than six months unless the US government lifts its sanctions.
As can be expected, this trade restriction is affecting the relationship between the US and Chinese governments. Political analysts say President Trump is using Huawei to contain China, with Beijing vowing to get back at Washington.
The escalating tensions may snowball into a drawn out cold war between the United States and China – the two world’s largest economies. This impasse is certain to affect international supplies of tech chips and components and possibly delay the launch of 5G networks required for future economies.