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Huawei ban fallout begins as chipmakers face global share drop

IT’S THE day after ‘that executive order’ and it seems that the US effective-ban on Huawei is already starting to bite, as lawmakers wake up to the realisation that no tech-manufacturer is an island.

For its part, Huawei has said that, given that its US operation was already shrunkified thanks to the inhospitable atmosphere, it’s not worried on losing out and warns that the US has more to lose from the decision.

Why? Because Huawei uses components from a bunch of US chipmakers, who will now either have to stop serving the tech giant or apply for a licence, details of which are not clear.

Let’s be clear about this – most components are made in China anyway, so any of these manufacturers could equally be in league with the Chinese government, based on the same arguments that The White House has been using over Huawei.

Qualcomm, Broadcom, fellow Chinese firm ZTE and a whole bunch of other component peddlers have been hit in overnight trading.

Some might question why everyone is so worried, given that sales over the past year have hit record levels and see no signs of a slowdown.

Thing is – there will be a slow down – those record sales are, in part down to Huawei stockpiling components, aware that the Sword of Damocles was hanging over.

But will all this affect us in the UK? You may be thinking not, but if Huawei is forced to find alternative components, or even go back to the R&D drawing board, you’re probably looking at a much more expensive range of handsets, across the board – a chip downturn would affect every manufacturer using those components.

It would also likely see the 5G rollout slowed dramatically, as the demand for components and network devices from other manufacturers shoots up. Huawei is ready to go, right now – but at what price? That’s the question facing governments around the world, including our own which yesterday said it would be reviewing its policies in light of the US action. μ

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Source : Inquirer

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