TECHNOLOGY Huawei calls US move to curb chip supply arbitrary and threat to telecoms sector
A ban imposed by the US Department of Commerce on Huawei is “arbitrary and pernicious” and “threatens to undermine the entire industry”, the Chinese telecoms company said.
“This new rule will impact the expansion, maintenance and continuous operations of networks worth hundreds of billions of dollars that we have rolled out in more than 170 countries,” Huawei said yesterday.
The department tightened restrictions on Huawei by banning companies from selling chips and other products made outside the US but “designed and produced using US technologies”.
Huawei was placed on a Security Entity List by the US government last year because of concerns over the security of its technology – a claim the company denies. The action meant US companies had to obtain a special licence to sell products to Huawei.
However, the department said in its ruling that the company continued to use US software and technology to design semiconductors, “undermining the national security and foreign policy purposes of the Entity List by commissioning their production in overseas foundries using US equipment”.
Huawei said the US was using its “own technological strengths to crush companies outside its own borders ... this will only serve to undermine the trust international companies place in US technology and supply chains”.
It said the Trump administration had “intentionally turned its back” on the interests of the Chinese company’s customers.
“This goes against the US government’s claim that it is motivated by network security,” Huawei said.
The Shenzhen-headquartered company is a key provider of 5G components in markets outside the US. By the end of last year, Huawei said it had managed to secure 77 5G contracts worldwide, of which 12 are in the Middle East.
About half of its contracts are in Europe, where it faces tough competition from local companies such as Nokia, which has 63 contracts, and Ericsson with 81.
Huawei’s current chairman Guo Ping also hit back at Washington’s efforts to stop the Chinese tech company from buying essential components.
“We still haven’t figured it out,” Mr Guo said on the stage at Huawei’s annual analyst summit yesterday. “The US government still persists in attacking Huawei, but what will that bring to the world?”
The Chinese government’s commerce ministry on Sunday criticised the US government’s action and said it would “take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprise”.
Huawei’s full-year profit and revenue rose in 2019 despite restrictions from the US but the company is bracing for a tough 2020.
During an earnings call in March, the company said it is anticipating 2020 to be challenging because of the disruptions caused by the coronavirus outbreak and the continuing restrictions preventing US companies from trading with it.
The telecoms manufacturer posted a 19.1 per cent rise in last year’s revenue to $123 billion (Dh451.41bn) while its net profit rose 5.6 per cent to $9bn, the company said.
This was the second consecutive year that Huawei’s revenue crossed the $100bn mark.
By the end of 2019, Huawei had secured 77 5G contracts worldwide, of which 12 are in the Middle East