The Trump administration had curbed Huawei Technologies’ access to global chip supplies and the company finally made an official response. The move was referred to as ‘arbitrary’ and that it would certainly have an impact on its business. On Monday, while making his keynote speech at the company’s annual global analyst summit, Huawei’s Chairman, Guo Ping said that their business would inevitably be affected and they would try to find a solution to it. In a Q&A session, Guo said that currently, survival was their motto and nothing else. He also added that Huawei was committed to comply with the rules outlined by the U.S.
He said that owing to U.S. pressures, the company had increased their inventory and R&D significantly. The move made by the U.S. Commerce Department just expands U.S. authority to ask for licenses for sales of semiconductors to Huawei. These semiconductors are made abroad with U.S. technology and the U.S. has now extended its reach for halting sales to the world’s No.2 smartphone maker. A year ago, Huawei had been added to the ‘entity list’ of the Commerce Department because of national security concerns. This was in response to the accusations made in Washington that U.S. sanctions on Iran had been violated by the company and it could spy on its customers.
The allegations had been vehemently denied by Huawei. However, the China hawks part of the Trump administration were extremely frustrated that the entity listing was not doing much to curb Huawei’s access to its supplies. The U.S. decision was referred to as ‘arbitrary and pernicious’ and said that it could undermine the whole industry globally. The company said in a statement that they were opposing the amendments made to the foreign direct product rule by the U.S. Department of Commerce. It also said that the company’s name being added to the entity list a year ago had also been without justification.
Guo disclosed that a total of $18.7 billion had been spent on purchases from U.S. supplier last year and they would continue making purchases if the U.S government allows them. He said that a lot of customers had supported the company, but also admitted that winning new contracts had become harder for Huawei since it was placed on the entity list. They had to rewrite 60 million lines of code and had to invest more than 15,000 man years in research and development for dealing with the pressures that were a result of being put on the entity list.
The company said that they were committed to complying with all the rules and regulations of the U.S. government. But, regardless of its efforts, the U.S. government had chosen to proceed completely ignored the numerous concerns of numerous companies as well as industry associations. The semiconductors are needed by Huawei for its telecoms equipment and smartphones. It has found itself at the center of the battle for global technological dominance between China and the United States, whose relationship has taken a turn for the worse in recent months over the origin of the coronavirus.
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