Huawei calls US move to curb its access to global chips arbitrary

Huawei says a US move to cut it off from global chip supplies will leave its business 'massively affected'.
An interpreter at work as Huawei chairman Guo Ping made his keynote speech at the company's global analyst summit in Shenzhen yesterday. He said survival is the keyword as the US acts to stop its access to supplies.
An interpreter at work as Huawei chairman Guo Ping made his keynote speech at the company's global analyst summit in Shenzhen yesterday. He said survival is the keyword as the US acts to stop its access to supplies.PHOTO: REUTERS

SHENZHEN • Huawei Technologies, in its first official response to the Trump administration's move to curb its access to global chip supplies, called it "arbitrary" and said its business would be impacted.

"We expect that our business will inevitably be affected. We will try all we can to seek a solution," chairman Guo Ping said in his keynote speech at Huawei's annual global analyst summit yesterday.

"Survival is the keyword for us at present," he said in a Q&A session.

Mr Guo said Huawei was committed to complying with US rules and it had significantly increased its research and development and inventory to meet US pressures.

Last Friday's move by the US Commerce Department expands American authority to require licences for sales to Huawei of semiconductors made abroad with US technology, vastly extending its reach to halt sales to the world's No. 2 smartphone maker.

The company was added to the Commerce Department's "entity list" a year ago due to national security concerns, amid accusations from Washington that it violated US sanctions on Iran and can spy on customers. Huawei has denied the allegations. But China hawks in the Trump administration were frustrated that Huawei's entity listing was not doing enough to curb its access to supplies.

Huawei said the new US decision was "arbitrary and pernicious, and threatens to undermine the entire industry worldwide".

Mr Guo said that Huawei spent US$18.7 billion (S$26.7 billion) buying from US suppliers last year and would continue to buy from them if the US government would allow it. He said customers have stood by the company, but acknowledged it had become harder to win contracts since the company was added to the entity list.

The company has had to rewrite 60 million lines of code and invest more than 15,000 man years in research and development in a bid to deal with pressures created by being placed on the entity list.

Mr Guo said Huawei has since remained committed to complying with all US government rules and regulations, but despite its efforts, the US government has decided to proceed and completely ignore the concerns of many companies and industry associations.

Huawei, which needs semiconductors for its smartphones and telecoms equipment, has found itself at the heart of a battle for global technological dominance between the United States and China, whose relationship has soured in recent months over the origins of the deadly coronavirus.

Mr Guo was far less vocal than his colleague Richard Yu, who runs the consumer division responsible for smartphones. The outspoken executive said the restrictions are really designed to safeguard American dominance of global tech.

"The so-called cyber-security reasons are merely an excuse," Mr Yu wrote in a post to his account on the messaging app WeChat earlier yesterday. "The key is the threat to the technology hegemony of the US" posed by Huawei, he added.

Mr Yu also posted a link to a Chinese article circulating on social media with part of its headline asking: "Why Does America Want to Kill Huawei?"

REUTERS, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on May 19, 2020, with the headline 'Huawei calls US move to curb its access to global chips arbitrary'. Print Edition | Subscribe