US chip rule will ‘inevitably’ impact business

A man wearing a face mask uses his mobile phone as he walks past a Huawei store in Beijing on May 16, 2020.

Wang Zhao | AFP | Getty Images

Huawei’s business will be “inevitably affected” by a new US rule that aims to limit exports of chips to the Chinese tech company, a senior official said on Monday.

Washington’s final rule requires foreign manufacturers using US chip manufacturing equipment to obtain a license before being allowed to sell semiconductors to Huawei.

Experts told CNBC that Washington’s latest regulation could be a “big blow” to the Chinese tech giant because it would hit Taiwanese chip maker TSMC, Huawei’s main source of chips for products such as smartphones and its networking equipment. In addition, Huawei will be hard pressed to find an alternative to TSMC to make the chips it needs, jeopardizing billions of dollars in revenue.

The United States is leveraging its own technological strengths to crush companies outside of its own borders. This will only undermine the trust that international companies place in American technologies and supply chains.

Guo Ping

Current Rotating President of Huawei

“Our business will inevitably be affected. Despite this, as last year’s challenges helped us to develop thicker skin, we are confident to find solutions soon,” said Guo Ping, current rotating president of Huawei , without giving precise figures. around the potential hit. His comments, in Mandarin and translated by Huawei, were the first public comments from the Chinese tech giant since the announcement of the decision on Friday.

Guo said the company has still not found a potential solution to the chip export rule and declined to give a financial forecast.

“Survival is the key word for us right now,” he said.

In a media statement released on Monday, Huawei said it “flatly opposes” the new US rule.

“The United States is leveraging its own technological strengths to crush companies outside of its own borders. This will only serve to undermine the confidence of international companies in American technology and supply chains. Ultimately , it will hurt American interests, “the statement said.

Guo used a speech at a Huawei summit on Monday to talk about the need for collaboration between countries, businesses and industry organizations while taking a tour of the United States.

“The long-term actions of the United States against major technology companies in other countries will undermine the confidence of the country in the use of American technology, worsen conflicts in world industry and, in the end account, will harm the United States “interests,” he said.

Huawei spent $ 18.7 billion on goods from American suppliers last year, Guo said, and “will continue to buy” from them if Washington allows it.

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