Huawei 5G phones use very few components from the US (1%)

Daniel Fowler
May 20, 2020

And it's also possible that a change in US leadership could also lead to a change in US/China relations when it comes to technology.

Guo was speaking at the opening day of Huawei's annual analysts summit in Shenzhen, a three-day event held largely online this year due to the coronavirus outbreak.

"We ask that you cease any such negotiations or discussions until you have briefed the relevant authorisation and appropriations committees with your plans, including any commitments you have made to funding, tax breaks, licensures, or other incentives", they added.

The logo of the Taiwan Semiconductor Manufacturing Corp in pictured in Hsinchu on Friday last week.

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Beijing has spent the past two decades and billions of dollars to create a Chinese semiconductor industry.

"Huawei categorically opposes the amendments made by the US Department of Commerce to its foreign direct product rule that target Huawei specifically", it said in a statement, adding that Washington adding it to the entity list a year ago was also without justification.

Huawei said Washington's move will affect many global industries.

"In the long run, this will damage the trust and collaboration within the global semiconductor industry which many industries depend on, increasing conflict and loss within these industries", reports Huawei. This will affect all foundries using US technologies, including those located overseas, some of which are Huawei's key suppliers. The company spends tens of billions of dollars a year on components and technology from USA and other suppliers, purchases that might be disrupted if output of smartphones and other products is blocked.

Nonetheless, China warned that the usa was harming its own interests by clamping down on Huawei.

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"Survival is the key for us now", Guo said, urging support from Huawei's suppliers and customers around the world.

Last year's supply chain ban prevented Huawei from spending the $18 billion with US suppliers that it shelled out in 2018. We can expect Huawei's piece of the pie to increase significantly. Huawei is an untrustworthy vendor and a tool of the Chinese Communist Party, beholden to its orders, the State Department said in a statement last week.

The new rules mean that Huawei would need a license to use any USA tech inside its Kirin series of processors that power its smartphones and tablets as well as telco equipment that it has deployed across the globe.

Huawei can not provide a business forecast covering this year for the time being, Guo said.

The trade war between the USA and China may be slated to become far more damaging soon.

The impact of the new US rules can be big on Huawei, as speculations started to circulate that TSMC, the chip maker based in China's Taiwan, has to cut its ties with Huawei.

The Chinese Department of Commerce strongly opposes the tighter US export controls, and said Sunday that such restrictions pose a huge threat to the global supply chain. This would allow these foundries to skirt around the new rules and ship chips to Huawei.

Watch Huawei's rotating President Guo Ping's address.

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