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Huawei boss promises to ‘switch to non-US suppliers’

Ren Zhengfei.jpg

The US embargo on Huawei is making the Chinese company less reliant on American suppliers, the company’s founder and CEO has said.

In an interview today Ren Zhengfei (pictured) says the US ban means the company will “use components made in China and other countries”.

This will be bad news for chip suppliers such as Qualcomm as well as software suppliers – including Google, whose Android operating system is used by Huawei and most of the world’s smartphone suppliers.

According to the interview, in the Financial Times, around 1,200 US suppliers of components and intellectual property are affected by the US embargo.

Last weekend in a surprise remark at the G20 conference in Osaka President Donald Trump said he was prepared to relax the embargo – but details have not yet emerged.

The US Department of Commerce (DoC) will have to remove Huawei and its affiliates from the entity list, its catalogue of companies that US companies and citizens – and anyone else within the US – are banned from trading with. So far the DoC has not published anything – and, with today being US Independence Day, the earliest anything can be expected is next week.

“The US is helping us in a great way by giving us these difficulties,” Ren told the FT. “Under external pressure, we have become more united than ever.”

He said that, following Trump’s G20 comments, “we don’t see much impact on what we are currently doing. We will still focus on doing our own job right.” That remark is taken to mean that Huawei will work hard to source hardware and software from non-US sources.

Earlier this week people close to Huawei told Capacity that such sources could include Japan, South Korea and Taiwan. Under the terms of the current embargo, they are restricted to using less than 25% US content in the products – hardware or software – they ship to Huawei.

This has led to a furious effort by companies such as Google to identify the exact source of every component or line of code.

Ren said in the interview: “We are developing our own components and we have strong expertise in doing so, which will enable us to survive. … We don’t have big problems with our hardware. But there is some impact on our software systems.”

Huawei is trying to convert its own operating system, Hongmeng, if its continued reliance on Android becomes untenable. However, that would require developers to produce new versions so that users of future Huawei smartphones can continue to use applications such as Instagram or Twitter and to find alternatives to Google Maps and Gmail.