SOURCE / ECONOMY
US' new Huawei ban only shoots itself in the foot: Expert
US’ new Huawei ban only shoots itself in the foot: Expert
Published: May 16, 2020 06:13 PM

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US' new Huawei ban would only shoot itself in the foot, blow the global supply chain cooperation, and damage its own credibility, experts said.

The comments come after the US imposed new restrictions to cut off Huawei's supply chain.

US Commerce Department said Friday that it was amending an export rule and the Entity List to "strategically target Huawei's acquisition of semiconductors that are the direct product of certain US software and technology," according to a statement on its website.

This new amendment to the rule stipulates overseas manufacturers of semiconductors that are using US software and technology, to obtain a license from the US before selling to Huawei.

On the Huawei side, without directly responding to the restriction, a picture of a Soviet jet hit by the enemy with the line "All heroes have scars," was shared in an internal company forum, in a bid to boost the morale of employees at a difficult time.

The US' ban would only push the Chinese chip industry to accelerate its own research and manufacturing ability, Xiang Ligang, director-general of telecom industry association Information Consumption Alliance, told the Global Times on Saturday. 

"There is an impact on Huawei in the short term. If Huawei cannot purchase OEM chips, it may only buy chips from Qualcomm and Samsung, which may have a negative impact on business. But in the long run, it would push China to shake the shackles of US influence once and for all as China is already advancing its own development and manufacturing ability," Xiang said.

He believed that it is very likely chips developed by Chinese mainland companies can replace that from Taiwan Semiconductor Manufacturing Co, a major supplier for Huawei's chipset unit HiSilicon within five years. 

"Currently, China's chip design capabilities have reached world-class levels as HUAWEI Kirin 990 5G is already the world's 1st flagship 5G SoC. The gaps in manufacture and production have been narrowed. With current technology, semiconductor manufacturing companies such as Semiconductor Manufacturing International Corporation can already partially replace TSMC's production capacity. If more support is given, it may completely replace TSMC in the future," he said.

In the wake of the latest ban, US chip stocks fell on Friday. Qualcomm fell 5.13 percent, TSMC fell 4.41 percent, and AMAT fell 4.39 percent.

US' arbitrary act to block shipments of semiconductors to Chinese telecom firm Huawei would only trigger a massive blow to the international cooperation and credibility of the US, he cautioned.

The Global Times, citing a source close to the Chinese government, said Friday that China is ready to take a series of countermeasures against the US ban, including putting US companies on an "unreliable entity list," launching investigations and imposing restrictions on US companies such as Apple and suspending the purchase of Boeing airplanes.

If the US government arbitrarily alters the rules of the market, the Chinese government will not sit idle and watch Huawei put on the chopping board; China will most likely take countermeasures against US firms, a Huawei executive told the Global Times during the release of Huawei's annual financial report in March when the US government was mulling the restriction on the Chinese technology giant.

Even if the US coerces TSMC to stop supplying Huawei, the Chinese technology company still has many other options for chip supply - such as partnering with companies in South Korea, the island of Taiwan, and companies in the Chinese mainland like Samsung, MediaTek, and Unisoc, said Huawei Rotating Chairman Eric Xu.