The long-anticipated trade ban by the US government on Huawei has sadly arrived and apart from the company, this development will hurt millions of fans and Huawei users globally. A handful of Huawei fans are even in the US and that number could have gone up to several million by now, if not for the blockade of the deal between Huawei and US carrier AT&T. While the trade ban will eventually have some effects on Huawei which is already on course to become the world’s largest phone vendor by 2020, there are indications that Huawei has been preparing for Trump’s “Doomsday” executive order for a while now.
According to an exclusive report on Nikkei Asian Review, Huawei had informed its global suppliers six months ago that it wanted to build up a stock of crucial components that would last for up to a year, in preparation for trade war uncertainties. The Chinese giant was also making moves to secure new sources that wouldn’t be affected by a US embargo. Another option in the works is to ramp up efforts at becoming more self-reliant, Nikkei Asian Review quoted sources familiar with the plans to have hinted.
The news agency also cited multiple sources to have hinted that Huawei had started preparations for the already existing worst-case scenario, about six months ago. Plans cut across several key components, extending beyond chips to include passive components and optical parts. For some components that are subject to higher risks of export controls, Huawei has stockpiled six months’ to more than a year’s worth of supply, while holding at least three months’ worth of less crucial ones, the sources said.
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In addition, Huawei which is currently the world’s second-largest smartphone vendor reportedly started certifying more chips, optical components, camera-related technologies and other parts suppliers based outside the US at the beginning of this year. The US may also try to get allies to get companies domiciled in their countries to ban sales of components to Huawei. This may likely not happen since the US Trade ban isn’t hinged on any evidence of wrongdoing. This is just another battlefield in the lingering US-China Trade war. How well can Huawei weather this raging storm and what further options does it have? Read Joel’s take on the ban to find out more.
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