Huawei is facing a “blockade order”,
what is the US afraid of？
As a member of Hays, Wang Lin (pseudonym) did not expect to be followed by friends in this way. In the past 72 hours, her social account was filled with customers, media, classmates, teachers and even A message from a distant relative.
Everyone is concerned about her, and her Heis, even if some of them are not very familiar with HiSilix’s business, the first time I heard that Heis is still from an “internal letter” on the Internet.
In the early morning of May 17, the US Department of Commerce’s Bureau of Industry and Security (BIS) officially listed Huawei as a “list of entities”. Subsequently, as a chip company owned by Huawei, He Sibo, president of Hisilicon Semiconductor, said in an internal letter to employees that Huawei has already made the assumption of extreme survival many years ago. Heis will use the “prepared tires” plan to honor the company. Customer’s commitment to continuous service to ensure the strategic safety of most of the company’s products.
A few hours after the news of the US Department of Commerce, Huawei officially issued the first statement in the internal forum, saying that “Huawei’s decision to oppose BIS. This is not in the interest of any party. Huawei will seek relief and work on this matter as soon as possible. Solution, take positive measures to reduce the impact of this incident.”
In the latest media interview, Huawei founder Ren Zhengfei said that even if Qualcomm and other US suppliers do not sell chips to Huawei, Huawei is “no problem” because “we have already prepared for this.”
Bullets flying across the industry chain
Within a year, from the “breakup” of terminal business and AT&T, to the “difficulty” from the US government, and the “rejection door” that occurred in the construction of 5G, the distance between Huawei and the US market has increased. The farther it is. As the world’s largest single-country telecommunications market, the United States has become Huawei’s last unsuccessful area on the global map, but Huawei, which has no US, has grown to become the world’s largest telecommunications equipment manufacturer.
According to the global telecom equipment market report released by IHS Markit, the global telecom equipment market in 2017 was US$37.2 billion, a significant decline from 2016. However, Huawei has increased its share against the trend, with 28% market share surpassing Ericsson (27%), followed by Nokia (23%), ZTE (13%) and Samsung (3%).
“Huawei has lost its rivals in terms of share and profits by relying on the accumulation of bits and pieces.” Dai Hui, who has worked at Huawei for more than a decade, told the First Financial Reporter that Huawei’s profit in the field of mobile communications is equivalent to several others. sum.
With the growth of Huawei, its suppliers in the industry chain are all over the world. Huawei’s rotating chairman Hu Houkun told reporters in an interview that Huawei’s industry involves 13,000 suppliers, and last year’s purchases exceeded $70 billion. Companies and countries throughout the industry chain are actually interdependent. If any ring is abnormally blocked, it will have a very big impact on the development of the entire industry chain and even the development of the global economy.
From the perspective of the global economic environment, Huawei’s main channel, ICT (information, communication and technology) industry plays a pivotal role in global trade. According to the World Economic Forum data, ICT products account for four of the top ten in the global merchandise trade rankings, accounting for 8.3% of total global trade. Integrated circuits are the world’s third-largest trading products after automobiles and oil, with a trade volume of more than $800 billion.
Among them, the United States has an early layout in the ICT field, and its overall scientific and technological strength and innovative ability are superior. A group of multinational corporations control the technical standards and occupy the high end of the value chain. China’s ICT industry system is complete and complete, covering all aspects from components, machine equipment, software, testing to assembly. On their respective runways, Sino-US companies compete and coexist.
However, as the US announced the inclusion of Huawei in the “entity list”, some companies in the ICT industry chain were all in an “anxious” state.
It can be seen that among the $70 billion purchases of Huawei in 2018, approximately $11 billion were from US companies such as Qualcomm, Intel and Micron Technology. If the United States continues to sanction Huawei, then the part of the revenue that can be imagined will disappear directly. At present, some companies have begun to be affected.
On May 17, Huawei’s optical component supplier NeoPhotonic plunged 20.63%, the biggest one-day drop in four years. Lumentum Holdings, another Huawei optical component supplier, fell 11.5%, the biggest decline in six months. Qualcomm fell 4%, Skyworks, Qorvo, and Xilinx fell 6.06%, 7.14%, and 7.27%, respectively. On the 18th, Huawei’s supply chain and chip stocks continued their previous day’s decline. Forbes data shows that Huawei’s contribution to the company’s performance has reached 10% or even higher.
At 2 pm on the 17th, Huawei’s consumer business CEO Yu Chengdong forwarded Huawei’s president’s letter to the staff and commented that “the US restricted list is not only for Huawei, but for US chips, software, components and other suppliers. It is a huge loss.”
Huawei has made sufficient preparations for this. An engineer from Silicon Valley in the United States posted in a forum saying, “The process would have taken one and a half months, and it was signed in three hours. Before last Friday (ban), the finished semi-finished products were all given as long as they had to buy.” In the past few months, Huawei’s stocking capacity has far exceeded that of other suppliers.
A Huawei employee from the corporate business department also told reporters that the colleagues in these days have a relatively stable mood. However, some customers have been nervous and anxious, and sometimes they need to communicate with them. Huawei has done a lot of preparatory work before, and most of the current supply chain is stable.
5G development competition
In an interview with the First Financial News, Ernst & Young Greater China Consulting Services Partner Chen Shengde said that China, the United States, Japan and South Korea are in the first echelon on the 5G track. He pointed out that from the perspective of 5G standard setting, China and the United States are relatively leading. “Because China has the foundation of 3G and 4G, we have spent a lot of money and introduced a lot of money. We participated in the 5G standard very early, while the United States There is a lot of accumulation.”
In Ernst & Young’s “China’s Sailing and Leading the World 5G” report, China is expected to be a world leader in the 5G development competition and is likely to become one of the first major markets in the world to deploy 5G. Ernst & Young expects that China’s 5G capital expenditure will reach 1.5 trillion yuan between 2019 and 2025.
Since the beginning of the previous year, the US government has tried to stimulate the private sector to invest in 5G in a variety of ways. The United States released the “5G FAST” strategy last year, which mainly includes three major contents, namely, allocating more spectrum resources for 5G, updating infrastructure policies for 5G commercial deployment, and updating outdated regulations. Last month, US President Trump also signed a presidential memorandum requesting the Ministry of Commerce to develop a long-term, comprehensive national spectrum strategy to prepare for 5G.
Although some US operators have regarded the Chinese market as a potential target, and even publicly evaluated China’s threats on 5G, Dai Hui told reporters that in accordance with the general technical rules, Huawei is building a 5G process in the future. Based on its traditional 4G network status, as well as 5G technology and cost advantages, it is bound to gain the largest market share. If non-trade barriers are not built, Huawei will likely become the hegemon of the 5G market. However, with the advent of 5G, there have also been some possibilities for the change of supplier structure, which is a rare opportunity for Western equipment suppliers to “re-partition the world”.
“Safety False Proposition”
For Huawei, another important reason why carrier equipment has been unable to enter the United States is the so-called “security issue.”
From 2001, Huawei established FutureWei, a North American subsidiary in Texas, and was forced to withdraw from the US telecommunications equipment market in October 2012. The experience of Huawei’s carrier business in the United States is full of twists and turns.
Xu Zhijun, chairman of Huawei’s rotating chairman, said in an interview that blocking Huawei’s entry into the 5G market means less competition, which may lead consumers to pay higher bills, and telecom companies have to increase spending. He said that political factors may play a more important role than actual security issues.
“Why should the US government authorities always target Huawei as a commercial company? If 5G will bring cyber security issues, I think these statements are politically motivated and have no factual basis.” Xu Zhijun said.
However, in the eyes of the United States, 5G will usher in the large-scale development of the Internet of Things and realize the connection between things and things. This means that 5G networks are more complex and more vulnerable to cyber attacks than previous generations of networks, and they believe that using Chinese devices will be more susceptible to surveillance in China. US officials say they are worried that Chinese telecom equipment manufacturers may monitor these networks or disconnect them at any time.
In the face of doubts, Guo Ping, chairman of Huawei’s rotating chairman, once again told the First Financial Reporter at this year’s financial report. “Huawei products do not have any backdoors. Now Huawei has also opened the front door and opened up the source code. The relevant institutions have done this for Huawei. The most rigorous test.” Guo Ping said that Huawei’s current tests on cyber security are unprecedented. He called on more peer companies to join such security tests, “Don’t be too far away from Huawei.”
“In the process of ICT development, you already have me in you. I have you, Huawei and partners work together to create the most competitive products. Huawei also has its own spare tire plan in the development process. If the tires are broken, there is still a preparation. Fetal, guarantee continuous growth.” Guo Ping said.
This article is adapted from https://tech.163.com/