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Huawei crackdown

Huawei calls on suppliers to help survive US crackdown

Rotating chairman vows to keep investing in new tech despite 'huge challenges'

Huawei Rotating Chairman Guo Ping is calling on the U.S. to rethink regulations targeting his company.

TAIPEI -- Huawei Technologies on Wednesday said it will continue to work with suppliers who are willing and able to stick by the Chinese company as it "battles for survival" against the increasingly intense U.S. crackdown.

"Huawei is in a difficult situation these days. Non-stop aggression from the U.S. government has put us under significant pressure," Guo Ping, Huawei's rotating chairman, said on Wednesday. "Huawei is still carefully assessing the impacts, but battling for survival is our main focus now."

Guo, speaking at the annual Huawei Connect tech forum, said the company will continue to invest in connectivity, high-performance computing, the cloud and artificial intelligence, and will continue to support all supply chain partners who can still work with Huawei.

"Helping our supply chain grow stronger will help Huawei itself," Guo said. As an example, he cited how Huawei has worked with Cooler Master, a traditional supplier of heat dissipation solutions, to upgrade its technologies for use in 5G base stations. "We will keep working with our partners to improve their capabilities, making sure that there's plenty of benefits for them throughout the process, and that we can grow together," the executive added.

Guo's remarks are the first public comments by a Huawei executive since the latest of Washington's crackdowns took full effect last week. The U.S. Commerce Department announced on Aug. 17 that any suppliers using American technologies in their development or production processes must obtain a license in order to ship to the Chinese company. Huawei and its suppliers had been scrambling to finalize shipments before the grace period for the new rule expired on Sept. 15.

At a question-and-answer session following his speech, Guo said Huawei has relatively sufficient chip supplies for its telecom equipment, server and cloud businesses. "However, for chips for smartphones, which we consume hundreds of millions of every year, we are still looking for ways to address the issue," he said.

He added that Huawei is willing to buy from U.S. suppliers that receive proper licensing, including Qualcomm, but also called on Washington to rethink its crackdown, saying, "We hope that the U.S. government will give their laws and regulations a second thought."

Zhang Ping'an, president of Huawei's consumer cloud services, also took part in the Q&A and revealed for the first time that the company is in talks with other Chinese "smart device vendors" to expand the use of the Harmony operating system beyond Huawei's own devices. Huawei began aggressively developing its own version of Google's mobile services and Android operating system after losing access to both due to Washington's crackdown.

"We are even more determined to develop our own Huawei Mobile Services, even though we will face restrictions in chip supplies. We still have several hundreds of million users. We will use HMS and our HarmonyOS to keep serving them," Zhang said.

On the hardware front, Intel and AMD -- the two most important suppliers of central processing units (CPUs) for PC and servers -- this week made the rare move of publicly confirming that they have been granted licenses to ship some products to Huawei, though they did not specify the scope of the licenses. Both Intel and AMD are U.S. companies.

Huawei, meanwhile, introduced a new generation of servers on Sept. 21 that run on Intel microprocessors, a sign that the Chinese company could continue to have access to important American components. Earlier in September, Huawei unveiled two new laptops built with Intel's and AMD's CPUs.

Intel China President Ian Yang this week made a rare comment to Chinese media outlet Yicai saying his company, the biggest U.S. chipmaker by revenue, remains fully committed to the Chinese market and that it is not reasonable for China and the U.S. to "decouple" their tech industries.

"China's advantages are not something any other country can replicate in a short period of time. ... So to be in the same boat with China is to follow the flow, to develop together," Yicai quoted Yang as saying.

So far, no non-U.S. suppliers have said whether they have received approval to ship to Huawei. Infineon, European's biggest chipmaker, told the Nikkei Asian Review that it takes compliance seriously and is putting in place up-dated processes in response to the new regulations. "As part of these processes, our licensing efforts, like those of many in the industry, are ongoing," Infineon said.

MediaTek, the world's second-largest mobile chip provider after Qualcomm, said it has applied for a license to keep serving Huawei. China's Semiconductor Manufacturing International Co., the country's biggest contract chipmaker, also confirmed it has sought approval from the U.S. government to resume business with Huawei, its top client, while reiterating it will strictly comply with U.S. regulations.

Taiwan Semiconductor Manufacturing Co., Huawei's most important chip production partner, said it has halted shipments, but it is not clear whether the company has applied for licenses to make chips for Huawei. Samsung Electronics, SK Hynix and Kioxia, three key Asian memory chipmakers, declined to comment on whether they have sought approvals from the U.S. government, while Sharp and Micron did not respond to Nikkei's request for comment on their current relationship with Huawei.

Sony declined to comment on Huawei, but it said it has complied and will continue to comply with all applicable laws and regulations in the conduct of its business, including U.S. export laws.

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