Samsung is reportedly investing heavily in its telecom infrastructure business to fill the market gap left by Huawei’s ban from 5G business in the developed markets.
According to a new report from Reuters, Samsung is pouring resources into its telecom infrastructure business unit, aiming to seize the opportunity created by the ban on Huawei in a number of important western markets.
“We’re bolstering our network business to seize market opportunities arising at a time when Huawei is the subject of warnings about security,” said a Samsung source to Reuters. With a drop in revenue from its mobile division and an uncertain growth trajectory for its semiconductor business, Samsung is reportedly planning to invest $22 billion USD in 5G, artificial intelligence, and other areas over the next three years.
“Samsung is focused on building trust with our partners and leading the global 5G markets, regardless of other companies,” it said in an emailed statement to Reuters.
Samsung’s telecommunications infrastructure business had been somewhat insignificant until recently, trailing Huawei, Nokia, Ericsson, Cisco, and ZTE, according to figures from the research firm Dell’Oro Group. The South Korean company is now seizing a chance when first ZTE and now Huawei have both found themselves being shut out of the lucrative 5G markets in one country after another in the developed world.
As more European countries follow the United States and turn away from the world’s biggest telecommunications equipment-maker, scrutiny grows over Huawei’s close ties with the Chinese government and allegations its equipment could hold backdoors to enable spying, which the company denies.
While the United States has already largely barred Huawei from supplying its government and contractors, it sees European and Canadian preparations for 5G mobile networks as a security risk that could also endanger the United States.
“Going with an untrusted supplier like Huawei or ZTE will have all sorts of ramifications for your national security and … since we are military allies with almost all members of the European Union, on our national security as well,” an unnamed US official said last week.
Samsung’s efforts have already caught the attention of potential customers: an executive from French carrier Orange told Reuters the company’s CTO Mari-Noelle Jego-Laveissiere was impressed with the equipment being developed by Samsung and other alternative suppliers during a visit to Japan, where 5G testing is at an advanced stage.