According to Bloomberg News, Intel, Qualcomm, Xilinx, and Broadcom, which provide different types of components to Huawei, have sent notices to employees to suspend supply of products to Huawei.
Google, which is most relevant to consumers, has announced that it will suspend its confiscation. Huawei’s new mobile phones will not be able to use Gmail, YouTube, Chrome and other Google software in the future. Huawei’s overseas market is believed to be hit, but Huawei claims that its products and services are not in the Chinese market. Affected.
Huawei said it was prepared for this and has tried to find suppliers outside the US. Huawei’s founder Ren Zhengfei said in an interview with Chinese media on Tuesday (May 21) that Huawei is ready to make an extreme cutoff. Europe is very close to Huawei, and Huawei will not easily rule out US chips.
Ren Zhengfei also stressed that Huawei "has not had mass production capacity because of the US ban."
However, industry insiders and experts believe that it is not easy to find alternatives or self-development in some core technologies and chips.
Seeing the impact of Huawei from the phone motherboard
To know how much damage the US ban has on Huawei, you can first look at the Huawei P30 Pro flagship smartphone motherboard, which is only as big as a finger, but relies on a complex supply chain network.
Huawei's own HiSili products only have RF transceivers (1 in the figure) and audio chips (4 in the figure).
US semiconductor company Skyworks is responsible for designing and manufacturing the chip's RF front-end module (2 in the figure) so that the phone can receive the mobile phone network signal; another US semiconductor company Qorvo is responsible for manufacturing and processing different stations. The channel's RF front-end module (2 in the figure), both of which are affected by the US ban.
Micron Technologies, a US semiconductor company, designed flash memory (5 in the figure) to make the P30 have 128GB of storage. According to the number, about 13% of Micron's annual revenue comes from Huawei's supply.
SK Hynix Semiconductor Co., Ltd. is responsible for the design and production of dynamic random access memory (DRAM, 6 in the figure). This company is not affected by the US ban, but there are still some diplomatic problems. The newspaper raised concerns that SK hynix and other Korean chip makers have added fares to China, but these companies denied it.
This is just a motherboard on a mobile phone. Last year, Huawei announced a list of core suppliers with 33 US companies. On Monday, the US Department of Commerce announced a temporary license to allow some companies to continue to support existing networks and equipment, but in the long run The cooperation between the Chinese and American scientific and technological communities is still unstable and unpredictable.
The analysis believes that the US will encourage China's independent research and development, but this is difficult and expensive, but in the long run it can give China an opportunity to set its own standards for future technology.
Intel is a major supplier of some of Huawei's server chips. Qualcomm provides Huawei with mobile phone chips and modems. Xilins provides Huawei with network programmable chips. Broadcom supplies some removable chips for some network machines.
According to Bloomberg News, the four companies have decided not to supply Huawei, but these companies declined to comment.
Looking for information, in 2015 alone, Huawei purchased $1.8 billion worth of Qualcomm chips, $680 million in Intel chips, and $600 million in Broadcom chips. Reuters reported that Huawei spent $70 billion on external procurement components in 2018, of which $11 billion was purchased from US companies.
Bloomberg and the Nihon Keizai Shimbun quoted sources as saying that Huawei was warned by US government officials early that it would explore suppliers outside the US. At the end of last year, it began to reserve large quantities of chips and important components, even if the US banned companies from supplying products to Huawei. Huawei can also operate for three months. Some important components may face more stringent export controls, so the storage will be even larger.
According to sources, Huawei will look for multiple suppliers for each component and does not want to rely on a single company to prevent other countries from following the US ban on Huawei.
After all, the cargo reserves are only enough to cope with short-term time. It is also questionable whether we can find alternative suppliers in time and whether Huawei's newly developed telecommunications products can use these reserve chips.
Ryan Koontz, an analyst at Rosenblatt Securities, said that Huawei still relies heavily on US semiconductor products. In the construction of 5G networks, it may also be delayed due to lack of US supply, implicating global supply chains. It will have a great impact on the global telecommunications market.
The US Information Technology and Innovation Foundation issued a report on Monday, referring to strict technology export control to make US companies lose $56.3 billion in export sales over the next five years.
Xu Jialong, deputy head of the Department of Information, Business Statistics and Operations at the Hong Kong University of Science and Technology, told BBC Chinese, "It is very difficult to find alternatives in the high-tech market because these alternatives have patent protection, even if they are self-developed, they must have high for the first time. Technical requirements, the second is to ensure that no patents have been infringed."
Take Google as an example. Even if Huawei can use Google's free open source operating system provided by Google for free, if the company needs it, it still has to negotiate with Google to make changes, etc., reflecting the dependence of Chinese companies on Android.
There are opinions that China can independently develop operating systems, but Xu Jialong said that this is a very difficult and time-consuming thing. "This is why there are only two or three systems in the mobile phone market... It’s not a matter of setting up your own system. Things."
He pointed out that enterprises must have a sense of crisis. Once the product infrastructure components need to rely on others, it is necessary to prepare contingency measures when others do not supply. This problem is particularly serious in the high-tech market.
Suppliers outside the US
Some Chinese industry insiders told BBC Chinese that Huawei is highly dependent on high-end chips and power devices. Some tools and software do not have the ability to conduct self-research. Even with the design capability of low-end chips, in terms of mass production and good production. To be optimized.
According to industry insiders, the US ban not only affects Huawei, but also affects Huawei's supply of materials and other products to other companies, affecting the development of the entire telecommunications, 5G network and technology industry.
"Nikkei Business News" news that Germany's Infineon Technologies will also stop supplying to Huawei, reflecting that the US ban not only affects US companies. But then Huawei denied the news, saying that "the German chip manufacturer Infineon did not stop supplying."
According to Huawei's annual report, in 2018, the operator's business income was 294 billion yuan, and the consumer business was about 348.9 billion yuan. In terms of sales revenue, China reached 372.1 billion yuan in 2018, and Europe, Middle East and Africa totaled 204.5 billion yuan.
Huawei's HiSilicon has a certain independent research and development capability to design chips. However, Huawei is involved in a wide range of businesses and products. Not a few companies can support every business of the company.
According to some analysts, about 60% of Huawei's 70 suppliers are located in Asia. Asia's largest chip supplier, Taiwan's integrated circuit (TSMC), which is responsible for helping Huawei produce chips, and some Japanese suppliers have said that they will continue to evaluate the impact of US decisions and will continue to cooperate with Huawei for the time being.
Fang Baoqiao, honorary president of the Hong Kong Information Technology Industry Association, told BBC Chinese that the United States has close ties with Taiwan and Japan. These overseas companies are currently holding a wait-and-see attitude and will continue to supply to Huawei, depending on whether the United States will expand sanctions and its follow-up measures. It will definitely affect these companies that do business with Huawei.
Some people believe that although it has been blocked by American technology companies such as Google and Intel, Huawei has the technology of assembling 5G network equipment, which can become a bargaining chip with the US government and enterprises. Fang Baoqiao believes that Huawei's 5G equipment also needs US components and technology. At the time of Sino-US trade negotiations, Huawei may be the most likely to compromise with the US government. Otherwise, it may lead to China's trade negotiations with the United States in different places. concession.