Qualcomm, Intel, and Other Chipmakers Reportedly Stop Dealing with Huawei After US Blacklist
Huawei’s supply chain is under attack with top US tech chipmakers freezing its orders to comply with the U.S. Commerce Department’s decision to blacklist the Chinese telecoms giant.
After Google announced that it’s ceasing some business with Huawei, Bloomberg reported today that American chipmakers like Intel, Qualcomm, and Broadcom are stopping component supplies to the Chinese tech giant until further notice.
The moves, which had been anticipated, “seriously cripples” the world’s largest provider of networking gear and number two smartphone vendor. The Trump administration on Friday blacklisted Huawei — which it accuses of aiding Beijing in espionage — and threatened to cut it off from the US software and semiconductors it needs to make its products.
Google yesterday said it will “immediately” suspend doing any business with Huawei that involves the transfer of any of its hardware or software products. What that means is that Huawei’s smartphones and other mobile devices will no longer have access to any Google services or updates on its Android platform.
The ban on chipmakers doing business with Huawei could have much wider repercussions, however. Bloomberg noted that Intel is its main supplier of server chips, while Qualcomm provides it with processors and modems for many of its smartphones. Meanwhile, Xilinx sells programmable chips used in networking and Broadcom is a supplier of switching chips, another key component in Huawei’s networking equipment. A sales ban could hurt all of these companies, too, since they’re increasingly reliant on China’s economy for growth.
Huawei “is heavily dependent on US semiconductor products and would be seriously crippled without supply of key US components,” said Ryan Koontz, an analyst with Rosenblatt Securities. The US ban “may cause China to delay its 5G network build until the ban is lifted, having an impact on many global component suppliers.”
Although Huawei has reportedly stockpiled between six months to one year of key components in preparation for the US crackdown, Germany-based chipmaker Infineon’s decision to halt shipment signals greater trouble ahead for Huawei — it shows that non-US suppliers are adopting an equally aggressive stance towards the Chinese firm.
The U.S. government has previously committed to similar actions against other Chinese companies, most notably in the ZTE ban last year. That ban was eventually lifted, which should give Huawei fans in the U.S. some hope, but it’s no guarantee that this ban will play out in the same way.