Exclusive: U.S. moves to cut Huawei off from global chip suppliers

[rott]

Canada.

@flowerfan2020 he is a

 

[somsak]

I am a stupid programmer. My humble solution I did for my previous work project.
I used to solve the problem of aged old client computers for a client-server software system.
The aged client computers are slow to calculate. How to solve?
What I did was to utilize the human respond time for server computational time, sending Async communication for server computation.
I compute a cache of all possible human action in advance at server.

Here is my humble suggestion to Huawei.
Huawei may "trade communication speed for computational power".
The idea is: "Since Huawei has a good communication speed, but use aged old technology for client, the heavy computations should be move to server as much as possible". The client become a mere monitor, and joysticks.
Harmony OS should be design in a way that optimize this as much as possible.

 

[Reashot Xigwin]

How is China cut off from global market? Even Huawei smartphone still can be shipped to US thru parallel importer.

If the world is cut off from China, apple and many US tech firm will go bust. Currently , all apple phone is made in China.

You seems to have mix up between cut off from US tech supplier for parts vs cut off from global market...

Only Huawei is being targeted. Read again mate.

& Also no one in their right mind would buy a phone that don't have access to Google play store.

 

[FairAndUnbiased]

lol surgical. This is government telling private businesses around the world - not just in their own country, but around the world - that they cannot use property that they have purchased using their own money, with no contract signed with the government at time of purchase, for activities that fall within intended use of said property.

This is brute force, and has to met with such.

 

[antonius123]

Only Huawei is being targeted. Read again mate.

& Also no one in their right mind would buy a phone that don't have access to Google play store.

Then what will happen if Huawei sell their smartphone business unit to BBK, or Xiaomi, or TCL, or Lenovo?

Huawei will keep alive with 5G telco solutions; it can use 14nm which SMIC could produce.
Huawei smartphone will be alive as well under other company, using Qualcomm etc.

6G maybe using 1 generation behind semiconductor fab of the latest smartphone (perhaps 7nm), that China will be able too.

Only Kirin for latest smartphone perhaps will die, the latest may be Kirin 1080.

 

[striver44]

Zak DoffmanContributor
Cybersecurity
I write about security and surveillance.

• 12-month stockpile, maybe a little more. By the time that depletes, it needs China to have solved its problem.
  
  Huawei has been talking “survival” on and off since the initial blacklist hit—but it has never meant it. Before now, the greatest issue has been U.S. lobbying foreign governments to ban the company’s 5G networking equipment and the loss of Google from the new flagship phones it has launched. Huawei CEO Ren Zhengfei has likened the last year to patching the wings on a damaged aircraft. Well, the latest U.S. salvo just repo’d that aircraft’s engine. Once it lands, it won’t take off again, not unless China can come to the rescue.
  
  With perfect timing, Huawei faced the press on Monday, May 18, during a pre-planned albeit hastily reduced analyst conference. Chairman Guo Ping managed to say very little about Trump’s latest attack. There was a prepared statement instead, a response to an “arbitrary and pernicious” U.S. move that “threatens to undermine the entire industry worldwide.”
  
  Today In: Cybersecurity
  • Hackers Claim Trump Dirty Laundry Data Has Been Sold To ‘Interested Party’
  Huawei can’t play this down—it’s too serious. The new ruling “will impact the expansion, maintenance, and continuous operations of networks worth hundreds of billions of dollars... in more than 170 countries.” It will materially damage a global industry and U.S. interests. “The U.S. is leveraging its own technological strengths to crush companies outside its own borders... We expect our business will inevitably be affected. We will try all we can to seek a solution.”
  
  
  It was the prospect of this particular U.S. ramp-up of sanctions, a threatened crackdown on Huawei’s silicon supply chain, that prompted the company’s leadership to warn back in March that “the Chinese government will not just stand by and watch as Huawei is slaughtered on the chopping board.” But as reported by my colleague David Phelan, that is now being put to the test.
  
  Huawei didn’t believe it would happen—it still assumes something will be done to water down the reversal of two decades of supply chain globalisation driving big tech. But the rhetoric from the U.S. is deadly serious. “We must amend our rules exploited by Huawei and HiSilicon and prevent U.S. technologies from enabling malign activities contrary to U.S. national security and foreign policy interests,” Commerce Secretary Wilbur Ross warned on Friday.
  
  Huawei’s “chopping board” comments were made in March, but China’s state-controlled media has brought the brinksmanship right up to date, warning on May 17 that “China is prepared to put certain U.S. companies on its ‘unreliable entity list’, imposing restrictions on or launching investigations into U.S. companies like Qualcomm, Cisco and Apple in accordance with Chinese laws.”
  
  Huawei isn’t the only blacklisted Chinese tech giant—camera manufacturers HikVision and Dahua, as well as AI unicorns SenseTime and Megvii are also on a restricted entity list. The focus of the new ruling is Taiwan Semiconductor Manufacturing Co., TSMC, which supplies Huawei from Taiwan, but which also used American technology in its development and manufacturing processes.
  
  China first threatened to blacklist U.S. firms shortly after U.S. sanctions were put into effect 12-months ago. Nothing came of the threats, but at the time, Beijing warned that “foreign enterprises, organizations or individuals that do not comply with market rules, deviate from a contract’s spirit or impose blockades or stop supplies to Chinese enterprises for non-commercial purposes, and seriously damage the legitimate rights and interests of Chinese enterprises, will be included on a list of ‘unreliable entities'."
  
  What that meant, in effect, is that any U.S. entities using U.S. sanctions as a reason not to meet contractual obligations to Huawei would be fair game for Chinese retaliation. This may now go further, a threat against U.S. firms using Chinese suppliers or its vast manufacturing base, even where there are no contractual commitments between them and Huawei. In short, it threatens a catastrophic impact on the global tech supply chain in the short to medium term. If TSMC falls foul of the restrictions and finds itself limited, that would impact a large number of U.S. tech giants, including its biggest customer Apple.
  
  On the surface, the U.S. move could decimate Huawei revenues. TSMC is the sole supplier to the company of the advanced silicon it needs for its flagship products, including phones and 5G radio equipment. Huawei is TSMC’s second largest customer—only Apple buys more. After the U.S. ruling was announced, TSMC said it will review its legal room to manoeuvre. Since then, reports have confirmed that it has stopped taking Huawei’s orders.
  
  China immediately pumped billions into SMIC, the nearest domestic rival to TSMC, but its tech is nowhere close to TSMC’s advanced offerings and there is no certainty it won’t also respect new U.S. rules. Huawei can shift from its custom-made chips, opting instead for off-the-shelf offerings from the likes of MediaTek, but that would represent a huge change in its technology strategy.
  
  Huawei does have a vast domestic market that will accept lower-spec’d phones and devices if the company needs to retrench, it has a balance sheet to sustain itself for some time. But once existing customers have to turn elsewhere for their 5G networking equipment, once Huawei’s cross-platform AI strategy, which relies on custom chips, is forced into a moratorium, the business will change fundamentally and will be hard to recover to its current scale.
  
  Realistically, there are two likely outcomes from this. Either there is some kind of compromise brokered between Beijing and Washington, with U.S. tech giants lobbying hard against this level of disruption, and while Huawei will be hit, it will be a manageable hit—rather like the loss of Google. Or, alternatively, this accelerates the east/west technology split and fires a starting pistol for China to replicate any missing areas of tech required to make its domestic champions self-sufficient. This will take time, but China likes to invest in the long-game.
  
  If China is forced into the long-game, there will be a wide range of significant repercussions: Retaliation against U.S. firms sourcing from or operating inside China; investments to replace U.S. tech, soliciting large Asian and European buyers to switch from U.S. to new Chinese tech, with greater surety of supply; and a global backlash as vast investments in 5G networks and other programs are undermined by Huawei’s inability to support and maintain.
  
  The fact that Huawei has 12-months is significant for another key reason—the U.S. election in November. America’s relationship with China, the tech split and the likely backlash over coronavirus disinformation will be a material election issue. The outcome will influence Sino-American relationships for a generation.
  
  Assuming no quick-fix or reversal, China needs an answer for Huawei on phones and 5G kit sales for when those stockpiles deplete. The company is a huge beast to feed, and is its biggest spender on R&D. As I’ve said in the past, Huawei is too big and too critical to China for it to fail, but Beijing now needs to pay a heavy price for that. Quite how that looks in practice, we’re about to find out.
  

 

[Han Patriot]

Zak DoffmanContributor
Cybersecurity
I write about security and surveillance.

• 12-month stockpile, maybe a little more. By the time that depletes, it needs China to have solved its problem.
  
  Huawei has been talking “survival” on and off since the initial blacklist hit—but it has never meant it. Before now, the greatest issue has been U.S. lobbying foreign governments to ban the company’s 5G networking equipment and the loss of Google from the new flagship phones it has launched. Huawei CEO Ren Zhengfei has likened the last year to patching the wings on a damaged aircraft. Well, the latest U.S. salvo just repo’d that aircraft’s engine. Once it lands, it won’t take off again, not unless China can come to the rescue.
  
  With perfect timing, Huawei faced the press on Monday, May 18, during a pre-planned albeit hastily reduced analyst conference. Chairman Guo Ping managed to say very little about Trump’s latest attack. There was a prepared statement instead, a response to an “arbitrary and pernicious” U.S. move that “threatens to undermine the entire industry worldwide.”
  
  Today In: Cybersecurity
  • Hackers Claim Trump Dirty Laundry Data Has Been Sold To ‘Interested Party’
  Huawei can’t play this down—it’s too serious. The new ruling “will impact the expansion, maintenance, and continuous operations of networks worth hundreds of billions of dollars... in more than 170 countries.” It will materially damage a global industry and U.S. interests. “The U.S. is leveraging its own technological strengths to crush companies outside its own borders... We expect our business will inevitably be affected. We will try all we can to seek a solution.”
  
  
  It was the prospect of this particular U.S. ramp-up of sanctions, a threatened crackdown on Huawei’s silicon supply chain, that prompted the company’s leadership to warn back in March that “the Chinese government will not just stand by and watch as Huawei is slaughtered on the chopping board.” But as reported by my colleague David Phelan, that is now being put to the test.
  
  Huawei didn’t believe it would happen—it still assumes something will be done to water down the reversal of two decades of supply chain globalisation driving big tech. But the rhetoric from the U.S. is deadly serious. “We must amend our rules exploited by Huawei and HiSilicon and prevent U.S. technologies from enabling malign activities contrary to U.S. national security and foreign policy interests,” Commerce Secretary Wilbur Ross warned on Friday.
  
  Huawei’s “chopping board” comments were made in March, but China’s state-controlled media has brought the brinksmanship right up to date, warning on May 17 that “China is prepared to put certain U.S. companies on its ‘unreliable entity list’, imposing restrictions on or launching investigations into U.S. companies like Qualcomm, Cisco and Apple in accordance with Chinese laws.”
  
  Huawei isn’t the only blacklisted Chinese tech giant—camera manufacturers HikVision and Dahua, as well as AI unicorns SenseTime and Megvii are also on a restricted entity list. The focus of the new ruling is Taiwan Semiconductor Manufacturing Co., TSMC, which supplies Huawei from Taiwan, but which also used American technology in its development and manufacturing processes.
  
  China first threatened to blacklist U.S. firms shortly after U.S. sanctions were put into effect 12-months ago. Nothing came of the threats, but at the time, Beijing warned that “foreign enterprises, organizations or individuals that do not comply with market rules, deviate from a contract’s spirit or impose blockades or stop supplies to Chinese enterprises for non-commercial purposes, and seriously damage the legitimate rights and interests of Chinese enterprises, will be included on a list of ‘unreliable entities'."
  
  What that meant, in effect, is that any U.S. entities using U.S. sanctions as a reason not to meet contractual obligations to Huawei would be fair game for Chinese retaliation. This may now go further, a threat against U.S. firms using Chinese suppliers or its vast manufacturing base, even where there are no contractual commitments between them and Huawei. In short, it threatens a catastrophic impact on the global tech supply chain in the short to medium term. If TSMC falls foul of the restrictions and finds itself limited, that would impact a large number of U.S. tech giants, including its biggest customer Apple.
  
  On the surface, the U.S. move could decimate Huawei revenues. TSMC is the sole supplier to the company of the advanced silicon it needs for its flagship products, including phones and 5G radio equipment. Huawei is TSMC’s second largest customer—only Apple buys more. After the U.S. ruling was announced, TSMC said it will review its legal room to manoeuvre. Since then, reports have confirmed that it has stopped taking Huawei’s orders.
  
  China immediately pumped billions into SMIC, the nearest domestic rival to TSMC, but its tech is nowhere close to TSMC’s advanced offerings and there is no certainty it won’t also respect new U.S. rules. Huawei can shift from its custom-made chips, opting instead for off-the-shelf offerings from the likes of MediaTek, but that would represent a huge change in its technology strategy.
  
  Huawei does have a vast domestic market that will accept lower-spec’d phones and devices if the company needs to retrench, it has a balance sheet to sustain itself for some time. But once existing customers have to turn elsewhere for their 5G networking equipment, once Huawei’s cross-platform AI strategy, which relies on custom chips, is forced into a moratorium, the business will change fundamentally and will be hard to recover to its current scale.
  
  Realistically, there are two likely outcomes from this. Either there is some kind of compromise brokered between Beijing and Washington, with U.S. tech giants lobbying hard against this level of disruption, and while Huawei will be hit, it will be a manageable hit—rather like the loss of Google. Or, alternatively, this accelerates the east/west technology split and fires a starting pistol for China to replicate any missing areas of tech required to make its domestic champions self-sufficient. This will take time, but China likes to invest in the long-game.
  
  If China is forced into the long-game, there will be a wide range of significant repercussions: Retaliation against U.S. firms sourcing from or operating inside China; investments to replace U.S. tech, soliciting large Asian and European buyers to switch from U.S. to new Chinese tech, with greater surety of supply; and a global backlash as vast investments in 5G networks and other programs are undermined by Huawei’s inability to support and maintain.
  
  The fact that Huawei has 12-months is significant for another key reason—the U.S. election in November. America’s relationship with China, the tech split and the likely backlash over coronavirus disinformation will be a material election issue. The outcome will influence Sino-American relationships for a generation.
  
  Assuming no quick-fix or reversal, China needs an answer for Huawei on phones and 5G kit sales for when those stockpiles deplete. The company is a huge beast to feed, and is its biggest spender on R&D. As I’ve said in the past, Huawei is too big and too critical to China for it to fail, but Beijing now needs to pay a heavy price for that. Quite how that looks in practice, we’re about to find out.

Dude, at most it will kill phones business. We have Xiaomi and BBK to fill that void. Why do you think Xiaomi shares are soaring. Huawei decimated Xiaomi with quality and price, now consumers in the West and India can enjoy a rejected brand from China. 14nm is adequate for most 5G applications.

How much do you wanna bet Huawei will still be alive even after 5 years? We are incubating dozens of Huawei. The trade war will create alot more new companies. In 2 to 3 years SMEE should have 10nm DUV and in 5 years 7nm to 5nm Euv.

 

[IceCold]

Dude, at most it will kill phones business. We have Xiaomi and BBK to fill that void. Why do you think Xiaomi shares are soaring. Huawei decimated Xiaomi with quality and price, now consumers in the West and India can enjoy a rejected brand from China. 14nm is adequate for most 5G applications.

How much do you wanna bet Huawei will still be alive even after 5 years? We are incubating dozens of Huawei. The trade war will create alot more new companies. In 2 to 3 years SMEE should have 10nm DUV and in 5 years 7nm to 5nm Euv.

There are many other brands like Vivo, Realme & Oppo that produce some quality phones at affordable price. Currently using Vivo S1 pro.
On a side note never thought Xiaomi is a rejected brand, if anything i have found Xiaomi redmi note series to be better in terms of their quality than Huawei.

 

[Rusty]

This will be interesting to see how it turns out.
I think both countries will change how they rely on each other.

As for Huawei, their biggest problem is their ties to the CCP. True or not, that is the perception.

If they can't convince people they have no ties (almost impossible due to how business is done in China) they will loose all access to the developed western market where the most money is made.

 

[Han Patriot]

There are many other brands like Vivo, Realme & Oppo that produce some quality phones at affordable price. Currently using Vivo S1 pro.
On a side note never thought Xiaomi is a rejected brand, if anything i have found Xiaomi redmi note series to be better in terms of their quality than Huawei.

I think xiaomi poco phones are OK, not the lower ends ones.

This will be interesting to see how it turns out.
I think both countries will change how they rely on each other.

As for Huawei, their biggest problem is their ties to the CCP. True or not, that is the perception.

If they can't convince people they have no ties (almost impossible due to how business is done in China) they will loose all access to the developed western market where the most money is made.

Come on... All corporations are tied to the government in some ways, CIA and Google are best friends.

 

[Han Patriot]

Then what will happen if Huawei sell their smartphone business unit to BBK, or Xiaomi, or TCL, or Lenovo?

Huawei will keep alive with 5G telco solutions; it can use 14nm which SMIC could produce.
Huawei smartphone will be alive as well under other company, using Qualcomm etc.

6G maybe using 1 generation behind semiconductor fab of the latest smartphone (perhaps 7nm), that China will be able too.

Only Kirin for latest smartphone perhaps will die, the latest may be Kirin 1080.

This is US last shot, semiconductor equipment, China has 2 weakness aeroengine and semiconductor equipment/process. Design wise we are already there, it's the process and equipment, both are interdependent. CHINA can produce 10 to 22nm EUV chips in a lab, problem is scaling up economically and to scale.

 

[Viet]

There are many other brands like Vivo, Realme & Oppo that produce some quality phones at affordable price. Currently using Vivo S1 pro.
On a side note never thought Xiaomi is a rejected brand, if anything i have found Xiaomi redmi note series to be better in terms of their quality than Huawei.

Buy Vietnam phones!

Vsmart Live is superior to Realmi and Xiaomi in price and performance.

Chinese low end and medium range smartphones have no future.


https://www.chinahandys.net/vsmart-live/

 

[k s ahmed]

huawei is mainly in telecomm.. phones arent their main business.
but as long as europe and other ocuntries give china business, usa saactions will only harm usa in the longer run..
if eu decides to cut the contact with china, they will stay behind in space race.. do they want to ?
and the impact of delayed iphones, delayed cisco equipment ? nobody is talkung about this .. they are focused *as usual) on the other country..
apple may go bust ..so as cisco.. or otherwise america will have to pay them millions to survive.. that means weakre economy.. not to mention the wars america is trying initiate.. its a dead end of the unite snakes ..
but all the articles are talking about china becuase they want to make their people beleive that what they are doing a great job , while they arent..

 

[ILC]

The logic basis is correct, the conclusion is wrong. Xi has no focus on foreign matters whatsoever. I heard, and spoke with many officials who were one handshake away from central committee members.

--------------
Now tell this to people who busted our international relationships overnight.
--------------
This is what I did bet myself before, but now circumstances are different. With Zhongnanhai doing all effort do sabotage what our diplomatic corps been doing, even that bet is off.

So what about building Islands in SCS? However here we can agree that's it is some kind of domestic issue, but with international consequences.

Another question what about belt and road initiative, A2B bank, and so on? I think that's the biggest international decision made by Xi, but I think in many cases these projects are a waste of money.

 

[AViet]

WASHINGTON (Reuters) - The Trump administration on Friday moved to block shipments of semiconductors to Huawei Technologies from global chipmakers, in an action that could ramp up tensions with China.

The U.S. Commerce Department said it was amending an export rule to "strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology."

Reuters first reported the news ahead of the department's release. The department said its "announcement cuts off Huawei’s efforts to undermine U.S. export controls."


The rule change is a blow to Huawei, the world's no. 2 smartphone maker, as well as to Taiwan's Taiwan Semiconductor Manufacturing Co Ltd (2330.TW), a major producer of chips for Huawei's HiSilicon unit as well as mobile phone rivals Apple Inc (AAPL.O) and Qualcomm Inc (QCOM.O). TMSC announced late Thursday it would build a $12 billion chip factory in Arizona. TSMC did not immediately comment Friday.

Huawei, which needs semiconductors for its widely used smartphones and telecoms equipment, is at the heart of a battle for global technological dominance between the United States and China.

Huawei, which has warned that the Chinese government would retaliate if the rule went into effect, did not immediately comment on Friday. U.S. stock market futures turned negative on the Reuters report.

"The Chinese government will not just stand by and watch Huawei be slaughtered on the chopping board," Huawei Chairman Eric Xu told reporters on March 31.

The United States is trying to convince allies to exclude Huawei gear from next generation 5G networks on grounds its equipment could be used by China for spying. Huawei has repeatedly denied the claim.

Huawei has continued to use U.S. software and technology to design semiconductors, the Commerce Department said, despite being placed on a U.S. economic blacklist in May 2019.


Under the rule change, foreign companies that use U.S. chipmaking equipment will be required to obtain a U.S. license before supplying certain chips to Huawei, or an affiliate like HiSilicon.

In order for Huawei to continue to receive some chipsets or use some semiconductor designs tied to certain U.S. software and technology, it would need to receive licenses from the Commerce Department.



NATIONAL SECURITY CONCERNS

Commerce Secretary Wilbur Ross told Fox Business "there has been a very highly technical loophole through which Huawei has been in able, in effect, to use U.S. technology with foreign fab producers." Ross called the rule change a "highly tailored thing to try to correct that loophole."

Ross said in a written statement Huawei had "stepped-up efforts to undermine these national security-based restrictions."

The Commerce Department said the rule will allow wafers already in production to be shipped to Huawei as long as the shipments are complete within 120 days from Friday. Chipsets would need to be in production by Friday or they would be ineligible under the rule.


The United States placed Huawei and 114 affiliates on its economic blacklist citing national security concerns. That forced some U.S. and foreign companies to seek special licenses from the Commerce Department to sell to it, but China hawks in the U.S. government have been frustrated by the vast number of supply chains beyond their reach.

Separately, the Commerce Department extended a temporary license that was set to expire Friday to allow U.S. companies, many of which operate wireless networks in rural America, to continue doing business with Huawei through Aug. 13. It warned it expected this would be the final extension.

Reuters first reported the administration was considering changes to the Foreign Direct Product Rule, which subjects some foreign-made goods based on U.S. technology or software to U.S. regulations, in November.

Most chip manufacturers rely on equipment produced by U.S. companies like KLA (KLAC.O), Lam Research (LRCX.O) and Applied Materials (AMAT.O), according to a report last year from China's Everbright Securities.

The Trump administration has taken a series of steps aimed at Chinese telecom firms in recent weeks.

The U.S. Federal Communications Commission (FCC) last month began the process of shutting down the U.S. operations of three state-controlled Chinese telecommunications companies, citing national security risks. The FCC also in April approved Alphabet Inc unit Google’s (GOOGL.O) request to use part of an 8,000-mile undersea telecommunications cable between the United States and Taiwan, but not Hong Kong, after U.S. agencies raised national security concerns.

This week, President Donald Trump extended for another year a May 2019 executive order barring U.S. companies from using telecommunications equipment made by companies deemed to pose a national security risk, a move seen aimed at Huawei and peer ZTE Corp.

https://www.reuters.com/article/us-...-off-from-global-chip-suppliers-idUSKBN22R1KC

Well it looks like Huawei will be cut off from TSMC chips.

The so-called "global chip suppliers" main actor is TSMC, an ethnic Chinese company and located just around 100km off the China coast and at least 10,000km from the US.

I can hardly believe the US can cut off TSMC from China. TSMC may depend somewhat on the US, but it much more depend on China.

Let's wait and see.