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Monday, May 18, 2020, 19:10
New rules designed to keep US tech on top, says Huawei exec
By Bloomberg
Monday, May 18, 2020, 19:10 By Bloomberg

Richard Yu, head of Huawei's consumer business group, speaks on stage during a presentation to reveal Huawei's latest smartphones "Mate 30" and "Mate 30 Pro" in Munich, southern Germany, on Sept 19, 2019. (CHRISTOF STACHE / AFP)

Huawei Technologies Co warned the latest US curbs on its business will inflict a “terrible price” on the global technology industry, inflaming tensions between Washington and Beijing while harming American interests.

China’s largest technology company said it will be “significantly affected” by a Commerce Department decree barring any chipmaker using American equipment from supplying Huawei without US government approval. That means companies like Taiwan Semiconductor Manufacturing Co (TSMC) and its rivals will have to cut off the Chinese company unless they get waivers - effectively severing Huawei’s access to cutting-edge silicon it needs for smartphones and networking gear.

Our business will significantly be impacted ... If further fragmentation were to take place, the whole industry would pay a terrible price.

Guo Ping, Rotating chairman of Huawei Technologies Co

ALSO READ: China condemns latest US curb on Huawei

Washington’s decision drew condemnation from Beijing, which regards Huawei as a national champion because of its success in dominating global networking technology. 

"Our business will significantly be impacted,”Rotating Chairman Guo Ping said at a company briefing with analysts in Shenzhen. “Given the changes in the industry over the past year, it dawned on us more clearly that fragmented standards and supply chains benefit no one. If further fragmentation were to take place, the whole industry would pay a terrible price,” he added.

Huawei is still assessing the potential fallout of the latest restrictions and couldn’t predict the impact on revenue for now, Guo said. On Monday, a swathe of Huawei’s suppliers from TSMC to AAC Technologies Holdings Inc plunged in Asian trading.

READ MORE: Huawei gets advanced chipmaker on mainland

Guo was far less vocal than colleague Richard Yu, who runs the consumer division responsible for smartphones. The outspoken executive said the restrictions that ostensibly aim to allay US cybersecurity concerns are really designed to safeguard American dominance of global tech.

“The so-called cybersecurity reasons are merely an excuse,” Yu, head of the Chinese tech giant’s consumer electronics unit, wrote in a post to his account on messaging app WeChat earlier on Monday. “The key is the threat to the technology hegemony of the U.S.” posed by Huawei, he added.

Yu also posted a link to a Chinese article circulating on social media with part of its headline asking: “Why Does America Want to Kill Huawei?”

The US is leveraging its own technological strengths to crush companies outside its own borders, spokesman Joe Kelly told analysts, reading from a prepared statement. 

“This will only serve to undermine the trust international companies place in US technology and supply chains,” Kelly said. “Ultimately, this will harm US interests.”

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