Huawei Technologies has apparently raised the use of components made in China for its newer smartphones. The news arrives as the company steers away from US made parts due to the US sanctions.

According to a NikkeiAsia report, the Chinese tech giant has doubled Chinese components in recently launched phones. Now, the company’s devices house over 60 percent of parts made in its home country. For those unaware, the company had to replace US made parts as the company was placed in the US government’s Entity blacklist which barred it from using many crucial American technology. So now, the brand has been working on using locally manufactured components more parts shipped from overseas.

Nikkei worked with Tokyo based research specialist Fomalhaut Techno Solutions and tore down a Mate 40E model. This handset is 5G enabled and was found to feature Chinese made parts that accounted for about 60 percent of the total value of all components. In other words, it is about twice as much as its predecessor, the Mate 30. Although, Huawei is still using certain key semiconductors like US made chips it still has in its inventory. However, this also means that the company is still reliant on this technology and could face further decline due to its current situation.

Notably, Fomalhaut found that a major part of the the rise in Chinese made components share arrived as the company used BOE Technology Group‘s display over a Samsung Electronics panel. The display alone accounts for nearly 30 percent of the overall value of a smartphone. Other notably Chinese parts include Mate 40E’s antenna switch, power control chips, and others like the fingerprint sensor and battery.

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The US recently added new entities into its trade blacklist, which were from Chinese origin. Now, the impact of these sanctions are already showing effects as TSMC (Taiwan Semiconductor Manufacturing Company ) has suspended new chip orders from one of the newly blacklisted firms.

According to a SCMP report, the world’s largest contract chip maker has stopped taking orders from Phytium Information Technology Co, which is one of the seven Chinese supercomputing related firms that were added to the US Entity List last week. As per a source close to the matter, the company will complete any existing orders that were placed before the Chinese firms were added to the blacklist over national security allegations.

Furthermore, a TSMC representative decline to comment on the matter but did state that the company would “abide by all the laws and regulations as always, and will operate according to the export restrictions.” Meanwhile, Phytium has yet to offer any statement regarding this matter. At the moment, while China is investing heavily in the development of its local semiconductor technology, it is still reliant on foreign technology and chips from overseas.

The nation’s supercomputers use processors made by tech giants like Intel, AMD, and IBM. According to Francis Lau, a computer science professor at the University of Hong Kong, “The sanctions would definitely affect China’s ability to keep to its leading position in supercomputing because all current supercomputers use mostly US-built components. Although there are alternatives made by other countries such as Japan and [South] Korea, the best components are still by the US.”

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Semiconductor Manufacturing International Corp., known as SMIC, was recently put on Entity List or U.S. export control blacklist. Now, the company has said that the move will hamper the development of its cutting-edge technologies.

The company has released a statement after doing an initial assessment and said that “the U.S. move will badly affect the company’s Research & Development and the production capacity construction of advanced technologies of 10 nanometers and below.” It added that there’s no significant impact on the operation and finances in the short-term as the company isn’t mass-producing the chips using the 10nm technology.

SMIC getting banned by the United States is a major blow for the Chinese government which is working towards making the country self-sufficient when it comes to manufacturing semiconductors and the company is leading the campaign.

From the development, it appears that the United States is determined to thwart every effort of China or Chinese companies to procure components for advanced technologies. To provide components to the companies in the Entity List, the U.S.-based firms will have to apply for a special license.

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This is similar to the situation Huawei is facing right now, which was put on Entity List by the Trump administration in its ongoing US-China trade war. While the Executive Order from Trump cited national security risk, no evidence to back that claim has been produced. Huawei has time and again denied any such allegations against the company.

SMIC has said that the company will continue to cooperate with relevant U.S. government bodies and will be taking all feasible measures to minimize adverse effects and work out a solution to continue its development.

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The US Government recently banned China’s partially state-owned Semiconductor company SMIC from using American tech. Now, it has added a dozen of companies including China’s technology and drone maker DJI to the economic blacklist.

As Reuters reports, the US Department of Commerce has added China’s SZ DJI Technology Co., Ltd to the entity list. The company has a trade name DJI which is currently the World’s largest drone maker. According to Commerce Secretary Wilbur Ross, DJI has involved in “ubiquitous surveillance to repress its citizens in Xinjiang and elsewhere.”

Some of the companies added to the entity list are as follows:

• SZ DJI Technology Co., Ltd
• AGCU Scientech
• China National Scientific Instruments and Materials
• Kuang-Chi Group

Specifically, the ban of the above companies is because they led to wide-scale human rights abuses within China. Precisely, the companies reportedly involved in abusive genetic collection and analysis or high-technology surveillance. In case you don’t know, the Entity list is a trade blacklist published by the US Department of Commerce’s Bureau of Industry and Security.

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Generally, it is the Govt’s prerogative to make its companies seek license to export, re-export, or transfer technology to the parties concerned. However, the entity list means that it bans US companies from exporting their technology to the blacklisted members. If we recall, US Govt confirmed that it has added SMIC, CNOOC to the list two weeks ago.

Coming back, DJI has responded to The Verge saying that it is disappointed with the Dept. of Commerce decision. Although it didn’t comment on the result of this action, it says People can still buy its DJI products as usual. Apart from Drones, DJI’s portfolio of hand-held products includes Gimbals, Action Cameras, Flight patrol and propulsion systems etc.

Hence, it will be interesting to see how this affects the enterprise businesses let alone individual consumers. Besides, these are not the only companies that the US Govt has banned. It is targeting Huawei and its subsidiaries like Honor citing National Security and Privacy concerns.

In fact, it is also preaching to other countries to avoid using Chinese technologies including 5G-equipments saying that they might be used for surveillance by the Chinese govt.

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The US is apparently planning on adding various Chinese companies to its trade blacklist today (18th December 2020). This would also include China’s largest chipmaker SMIC, as per two sources close to the matter.

According to a Reuters report, the move is the latest from the Trump administration’s efforts against China. Notably, it arrives just a few weeks before the Democratic President Elect Joe Biden takes the office, on January 20. As per the sources, the US government is aiming to add around 80 additional companies and affiliates to the ‘Entity List,’ which mostly comprises of China based firms.

Furthermore, the US Department of Commerce is also expected to designate some of these Chinese companies as allegedly having ties to China’s military, or are aiding in the construction and militarization of artificial islands in the South China Sea. Some of the companies even have allegedly been involved in human rights violations, as per the source. At the moment, the Trump administration has added more than 275 China based companies and their affiliates to the Entity List to target key Chinese industries.

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This most notably includes Huawei Technologies and ZTE, two major consumer electronics and telecommunications equipment providers. Now, even SMIC is reportedly the latest target for Washington, as the Commerce Department previously mandating suppliers to the company to apply for export licenses after stating that there was an “unacceptable risk” with its equipment being possibly used for military purposes.

Unfortunately, SMIC, the Commerce Department, or even the Chinese Embassy in Washington has yet to respond to this report. Similar to other Chinese firms, SMIC has denied the accusations of ties to China’s military. If the chipmaker is put on the Entity List, the company would be forced to seek a special license from the Commerce Department before being supplied with key components or materials from US based firms.

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In a major relief to the Chinese tech giant Huawei, the United States is now allowing more and more chipset makers to supply components to the China-based company as long as they are not used for the 5G business.

A new report coming from Financial Times indicates that this could offer a potential lifeline to Huawei as the sanctions imposed against the companies were more and less threatening the survival of the giant.

The smartphone business of Huawei, which is the most hit area for the company, now has a chance to make recovery. The report indicates that the application for a license to supply components to Huawei gets approved if the company demonstrates that the technology does not support 5G.

One of the executives of an Asian semiconductor company has said to FT that chips for mobile devices are not a problem and added that the company is optimistic to get a license to continue doing business with Huawei.

In an apparent US-China trade war, the United States put Huawei on Entity List in May last year, effectively banning the company from doing business with US-based companies or companies dealing with American technology, without a special license from the U.S.

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A couple of months, the restrictions were tightened as the United States banned the supply of chipset and technology to Huawei. While it stopped the supply of chips to Huawei, the ban has also been proven damaging for the overall semiconductor industry as suppliers anticipate loss of billions of dollars.

However, in recent times, more and more companies are getting a license to deal with the Chinese giant. Samsung Display recently got a green signal to provide OLED panels to Huawei and prior to that, Intel had confirmed that it received approval to supply chips.

It is being said that Japan-based Sony and China-owned OmniVision, which has its headquarters in California, have also received approval to supply CMOS image sensors that are used in smartphone cameras.

As per the report, more than 300 companies, including the likes of Samsung Electronics, Qualcomm, MediaTek, among others have applied for a license to do business with Huawei and they are expected to get approval in the coming weeks or months.

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The on-going US-China trade war keeps intensifying with every passing week. In the latest development, the U.S. State Department has submitted a proposal to add China’s Ant Group to a trade blacklist.

The development was first reported by Reuters, citing two people aware of the matter. However, it is not yet clear when the relevant agency in the government will review the company to determine its addition to the Entity List.

The news comes at a crucial time as the Ant Group is going public and could be worth up to $35 billion with dual lists in Shanghai and Hong Kong. It is reported that the move from the U.S. comes as the China hardliners are seeking to deter U.S. investors from taking part in the initial public offering (IPO).

The Trump officials fear Ant could potentially give the Chinese government access to sensitive banking data belonging to U.S. users. This is the same reason that the U.S. government has been using to ban Chinese companies, without actually offering any proof to back the claim.

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Adding Chinese companies to the Entity List has become the go-to move for the United States government. It started with Huawei in May last year, which has made it very difficult for the company to carry on with its smartphone business.

While the move of adding the company to Entity List has been effective for Huawei, the same move for Ant Group is unlikely to have any substantial effect given that the company has only 5 percent of its business outside of China.

For those who are unaware, Ant Group is the leading mobile payments company in China and offers several services, including loans, payments, insurance, and asset management. Alibaba Group Holding has a 33 percent stake in Ant and the company is controlled by Jack Ma, founder of Alibaba.

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Huawei is currently struggling to keep its smartphone business afloat as the Chinese giant has been heavily restricted by the sanctions from the United States from procuring or manufacturing necessary components.

But it seems that there is some hope for the company. Forrest Norrod, Senior Vice President at AMD has confirmed that the company has been granted a license to sell its products to some of the companies in the US Entity List.

The licenses secured by the company ensures that there won’t be a significant impact on the business at this time because of the China-focused restrictions from the US. He also added that the company is complying with all the rules and regulations.

However, it’s noteworthy that Forrest Norrod hasn’t revealed the names of the companies for which AMD has been granted licenses to carry on doing business. So, we are not sure if the Chinese giant Huawei is in it.

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Even if there’s no license for Huawei right now, his statement shed light on the fact that the United States is giving out licenses to companies for doing business with those firms that are in the Entity List. So, sooner or later, licenses can be granted to companies for doing business with Huawei.

Many companies have started lobbying with the United States government to reconsider some of the restrictions placed on Huawei, arguing that it impacts American businesses, both in terms of innovation and finance.

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In a bid to move more Huawei subsidiaries into its Entity List, the US Department of Commerce has now flagged Huawei India as well. This arrives after the Trump administration cut off chip supplies from TSMC to Huawei and is a move to pressure the Chinese group further.

In recent weeks, the trade dispute between the US and China have risen again, despite the ongoing Coronavirus pandemic affecting both nations. The former had often accused Huawei Technologies of being a front for the Chinese government and alleged espionage, which the latter and the consumer electronics vendor denied on numerous occasions. Now, Huawei and more of its affiliates based out of the US have been added to the Entity List, where they face a trade ban.

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For those unaware, the Entity List by the US Commerce Department is essentially a blacklist that bans companies or organizations found in the list to interact with US based companies. In other words, cutting off trade, technology, collaboration, and more. According to the US, “Huawei is an untrustworthy vendor and a tool of the Chinese Communist Party, beholden to its orders.”

Thus, even Huawei Technologies India Private Limited has been added to the list. The US State Department stated that they have “engaged for more than a year to share what we know about Huawei and other untrustworthy vendors with allies and partners around the world.” So by banning the Chinese group, the country is effectively cutting off any “loopholes” that Huawei was using to exploit US technology and threaten national security.

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Huawei was added to the US ‘Entity List’ last year. This forced American companies to cease their businesses with the Chinese telecom giant. Now, after a year, the ban has been further extended for another year, in addition to plans that will cut off Huawei from global chip suppliers like TSMC. To counterattack these harsh measures, China is readying its own ‘Unreliable Entity List’ according to a report by Global Times.

The Chinese Ministry of Commerce’s (MOFCOM) Unreliable Entity List will include “foreign organizations, individuals and companies that block or shut supply chains, or take discriminatory measures for non-commercial reasons, whose actions endanger the business of Chinese companies as well as global consumers and companies”.

The listed companies will have to “face necessary legal and administrative measures and the Chinese public will also be warned against it to reduce risks”.

According to insiders, the Chinese government is targeting the following US companies that are largely dependent on China.

• Apple
• Qualcomm
• Cisco
• Boeing

The problem for Huawei begun to pile up in early 2018 when AT&T dropped its plans to sell the Mate 10 Pro on account of pressure from the US government. This was later followed by warnings from the FBI, CIA, NSA, and three other US intelligence agencies to stop using or buying products from Huawei and ZTE. 

Also, these companies were later banned from supplying telecom equipment for 5G infrastructure. The US officials even warned other countries to avoid using technologies from these two brands.

Then in May of 2019, Huawei was finally added to the ‘Entity List’ and this led the company to lose its GMS (Google Mobile Services) license. Since then, the sales of Huawei and Honor branded smartphones tanked globally but it surged high in China.

Huawei has developed its own HMS (Huawei Mobile Services) to fill the void left by GMS for global markets. However, the company’s AppGallery still lacks a number of most-used apps and most users depend on Google apps, which are not available on new Huawei/Honor smartphones anymore.

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(Source)

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Amidst growing concerns from many workers over the Coronavirus pandemic, Amazon had to employ various precautionary measures to ensure the safety of its employees. For this, the e-retailing giant started providing face masks and conduct regular temperature checks through thermal cameras. However, it seems that Amazon has bought cameras from a Chinese company that was previously blacklisted by the US government.

According to a Reuters report, Amazon has spent about 10 million US Dollars for 1,500 thermal cameras. Although, it seems that the company Amazon has bought them from was previously implicated to be involved with China’s efforts to detain and harass Uighurs and Muslim minorities. The Chinese company, Zhejiang Dahua Technology, has declined any such allegation but it was one of the 28 companies that had faced the trade ban from the US Commerce Department back in October 2019.

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Zhejiang Dahua Technology was placed on the “Entity List” similar to Huawei. For those unaware, it is essentially the blacklisting of a company that is deemed to be a threat to the US. These companies face pressure from the US and have their operations hindered as they cannot buy or sell products/services to American based companies.

Apparently, the purchase from Amazon is legal since the “rules control the US Government contract awards and exports to blacklisted firms.” However, they do not stop sales to the private sector. Furthermore, Amazon did not confirm the purchase, rather, it was using thermal cameras from “multiple’ sources and not limited to just Dahua. This includes Infrared Cameras Inc and Flir, with about 500 cameras being used in the US. Interestingly, the Dahua made cameras are capable of facial recognition to match temperature data later on, but Amazon insists on not using this technology in their cameras.

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Huawei is one of the world’s most recognized electronics brands with gadgets ranges varying from everyday household products to smartphones, tablets, and laptops. Currently, the company is the world’s second-largest smartphone maker. However, being No. 2 isn’t enough for the company as Huawei’s CEO Yu Chendong said in an post-launch conference interview that the company was well on its way to become the world’s number one in 2019 if not for the U.S. Ban.

Earlier this year, the Chinese tech giant had its foreign operations crippled as the company was placed on the Entity List by the U.S. Commerce Department. This essentially blacklisted Huawei and banned American based companies like Google to have trade or business relations with the company. After being cut off from Google, the company lost Android OS (the primary OS found in its devices) and even its ARM-based chipsets that powered its devices.

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Just prior to the ban, Huawei had managed to take the number two spot away from Apple as the largest smartphone brand in the world. So it is not farfetched to assume that Huawei had a real chance of snatching the top spot from Samsung as well.

According to Richard, Huawei would’ve been the world’s number one brand if not for the ban this year itself. Furthermore, he said that people falsely assume that the brand is popular due to China and the Chinese people being patriotic; and went on to further back this statement with Huawei M6 tablet which reportedly sold over 2 million units worldwide. The senior executive stated that the most important reason for achieving such results is user satisfaction and not patriotism.

Going Forward, Huawei is seemingly confident about its future. Its indigenously built HarmonyOS or HongMengOS is expected to arrive in 2020 whilst the company plans on expanding further in the European regions.

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As expected, the U.S. government has extended Huawei’s temporary export license for another 90 days. This will be the third 90-day temporary extension granted to the Chinese telecommunications giant, ever since it was placed under the U.S. Entity list which barred U.S. companies from trading with Huawei.

Huawei’s last 90-day extension expired yesterday, so this announcement was timely. According to the Trump administration, the extension is granted to support the existing infrastructure built by Huawei in the U.S. For example, a number of rural carriers in the country are dependent on Huawei and ZTE’s telecommunications equipment. Replacing them immediately isn’t an option given that it could cost them nearly billions to suddenly shift to another equipment maker.

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“The Temporary General License extension will allow carriers to continue to service customers in some of the most remote areas of the United States who would otherwise be left in the dark,” said the U.S. Secretary of Commerce Wilbur Ross. “The Department will continue to rigorously monitor sensitive technology exports to ensure that our innovations are not harnessed by those who would threaten our national security.”

This 90-day reprieve also allows Google to support Huawei’s existing Android-based smartphones. However, this extension does not apply to new models, so smartphones like the Mate 30 Pro won’t still be able to run Google applications.

While Huawei’s international smartphone strategy is currently in a shambles, the company seems to be working hard with its HarmonyOS to find a workaround for Google Apps. Recently, Huawei’s Ling Hua revealed in an interview with CNBC that the company would announce its HarmonyOS strategy on November 20. He didn’t reveal what kind of strategy he was referring to but it could be anything from bringing HarmonyOS to smartphones to doubling down the focus on IoT products. You can read more about what he said about HarmonyOS and its future from this article.

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Huawei and the US are not exactly on their best terms despite the recent reprieve from the Trump administration. Currently, the telecommunications giant cannot buy or sell products to US companies for new devices. This is turning out to be incredibly damaging to the world’s second-largest smartphone maker, who relies on a number of American components to make its products. In fact, software solutions from companies like Microsoft and Google do not have viable replacements, making the ban even more damaging for Huawei.

But this ban affects US companies like Google as well, who have been Huawei’s long-time partners. In fact, Microsoft’s president, Brad Smith, recently said that the US ban on Huawei was both unfair and un-American. He calls for better transparency in Huawei’s case asking for more evidence. He further revealed that whenever Microsoft has approached the Trump administration about the Huawei case, it often gets a vague answer like, “Well, if you knew what we knew, you would agree with us.” Microsoft’s reply would often be, ‘Great, show us what you know so we can decide for ourselves. That’s the way this country works.’

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He further warned that the Trump administrations ban could expand beyond Huawei possibly affecting the competitiveness of US companies on a global scale. He says “You can’t be a global technology leader if you can’t bring your technology to the globe.”

Smith believes the solution to this is working together on a global scale. Implementing standards for privacy and data collection that are accepted on an international level, including China, is the way to move forward.

Currently, Huawei’s upcoming Mate 30 series isn’t licensed to use Google Apps. While Huawei reportedly has a workaround to this issue, it will still affect the sales of the Chinese smartphone maker and spoil its chances of overtaking Samsung as the biggest smartphone maker by 2020.

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(Source)

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Huawei has been under the spotlight for the past couple of months, especially since the US government banned the company from conducting business with its companies. After the recent G20 summit, the ban was eased by the government, but Huawei still wasn’t removed completely from the Entity List. However, despite the ban, Huawei seems to have done pretty well in the first half of the year as the company’s chairman, Liang Hua revealed at a press conference today that Huawei increased its revenue in the first half of the year. He further confirmed the name of its upcoming operating system, Hongmeng OS at the press conference. 

Huawei posting increased revenues in H1 2019 isn’t entirely surprising given that the ban came into effect in May. So Huawei’s performance in the initial four months of the year could have been pretty strong to mitigate its effect. If you remember, Huawei had already managed to ship over 100 million smartphones before the ban came into effect. So, the real damage from the ban will probably be seen in the second half of the year. Note that initial estimates revealed that Huawei’s US trade ban was likely to wipe out $30 billion of the company’s revenue. 

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At present, Washington’s stance is to allow US companies to sell their technology and products to Huawei as long as these products don’t pose a threat to national security. But Huawei’s chairman isn’t happy with the current situation. In the press conference today, Liang said that “adding Huawei to the Entity List was neither justified or fair,” and that Huawei “should be removed from the list entirely”.

He further said that the company’s Hongmeng OS was developed for IoT products and that Google’s Android was the preferred OS for smartphones. “We haven’t decided whether to develop HongMeng into a smartphone OS yet” he added. But this could change if Huawei is barred from using Android on its phones.  

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(Source)

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