American technical giants Google, Intel, Qualcomm, Broadcom and Xilinx break cooperation with Huawei

As it was reported, US government has serious concerns to Huawei.

[dropcap]W[/dropcap]ith the recent escalation of trade war between US and China (on March 8 US reported about rise from 10% to 25% of duty fees on certain categories of imported from China goods with the total value of $200 billions) situation sharply deteriorated and now this conflict became a serious concern for all business of Chinese mobile phones producers

Last week, after Donald Trump passed an order about introduction of state of emergency for protection of information technologies from external threats. (including industrial espionage), US Ministry of Trade added Chinese Huawei and 70 linked with it firms to the black lit. Huawei prohibited buying components and technologies from American producers without special permission and sale their production on the US territory.

Now Bloomberg and Reuters write that Google, Intel, Qualcomm and Broadcom, following Trump’s order, declared about cessation of trade relationships with China.

Ryan Koontz

Ryan Koontz

“Huaweiis heavily dependent on U.S. semiconductor products and would be seriously crippled without supply of key U.S. components. The U.S. ban may cause China to delay its 5G network build until the ban is lifted, having an impact on many global component suppliers.”, — said Ryan Koontz, an analyst with Rosenblatt Securities Inc.

If break of relationships with Intel, Qualcomm and Broadcom would have serious consequences for Chinese producer, but company will be able to pass through them, loose of Google will cause violate company’s plans to become a leader among smartphone producers by the end of the year. Cessation of cooperation means that Huawei will lose access to OS Android updates and all producer’s future smartphones will have no support from Google Play and popular services as Search, Gmail and Chrome. To clarify, Huawei will be able to use Android in future, as this system spread by open license without any Google support.

For old models, Android updates (not EMUI) will be further released, and Google Play support will be preserved. Thereby, Huawei will have to release devices with own alternative shop of application, that may immediately decline smartphones’ popularity in Europe.

Huawei’s bonds now (according Bloomberg)

Huawei’s bonds now (according Bloomberg)

However, Microsoft have not made any claims about cessation of cooperation with Huawei, it is unlikable that software giant would ignore governmental order. Consequently, Huawei will not be able to produce laptops with Windows.

It is worth remembering that Huawei for a long time develops own OS for PCs and mobiles. Not so long time ago head of consumers’ direction Ye Chendun said that company may refuse from Windows and Android for their own developments. Obviously, this transition will be slow and quite painful for Huawei.

Ren Zhengfei

Ren Zhengfei

It is not excluded that Huawei finally will be able find negotiation with US authorities. However, there is no prerequisites for it. Otherwise, Huawei president Ren Zhengfei that company is not going to agree to change of management and agree on external monitoring by US requests, as it did ZTE company.

“The extreme scenario of Huawei’s telecom network unit failing would set China back many years and might even be viewed as an act of war by China, Such a failure would have massive global telecom market implications”, — Ryan Koontz wrote.

Actions of American companies would cause to escalation of tension between Washington and Beijing and lead to protracted Cold war between world largest economies.


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Sophia Zimmerman

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