Huawei to take ‘months’ to assess impact of US chip ban

Huawei to take ‘months’ to assess impact of US chip ban, while Deutsche Telekom warns of ‘Armageddon’

08 July 2020 | Alan Burkitt-Gray

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Huawei says it will take “months” to assess the impact of tightening restrictions on using chips designed with US patents.

The US extended in May last year’s ban on American chip suppliers supplying Huawei to include non-US companies that use US-based intellectual property under licence.

Meanwhile a report from Germany suggests that Deutsche Telekom is likening the threat of a complete ban on Huawei to “Armageddon”.

“These measures are completely unjustified,” said Huawei VP Victor Zhang (pictured) in a media briefing this morning. Huawei is co-operating with the UK’s National Cyber Security Centre (NCSC), run by the British intelligence community, to assess the impact.

“It is too early to assess the long-term impact. It is premature,” said London-based Zhang, speaking on a conference call to media. “We urge a cautious and evidence-based approach. It is important to wait until all the facts are known.”

Zhang said that a decision “will impact” on the UK’s declared strategy to roll out gigabit fibre to every home and to speed up implementation of 5G networks. “We want to find solutions. We will join our partners and suppliers,” he said.

But despite repeated questioning, Zhang refused to estimate how long the process will take. “We need to have months to understand the impact on operators,” he said. “It takes months to understand [the long-term impact].”

Zhang warned that a ban on Huawei could delay the UK’s 5G deployment by one or two years. A 12-month delay would cost the UK economy £9 billion, while a 24-month delay would cost £29 billion, he suggested.

However, Zhang said that Huawei has stockpiled components for its existing commitments to customers, though did not back that up with figures.

“We are examining with our suppliers and partners so we can understand the long-term impact. It is too early to understand the full solution. It’s still too early to draw a conclusion. Once we have done the full analysis we will share the details with customers and government.”

Meanwhile German business newspaper Handelsblatt has reported seeing a Deutsche Telekom document that it says compares a ban on Huawei to “Armageddon”, though neither Huawei nor Deutsche Telekom officials would confirm that. The newspaper quotes an unnamed manager as saying: “We should never have relied so heavily on Huawei.”

A Deutsche Telekom spokesman did tell Handelsblatt that banning Huawei from its 5G programme would delay expansion “massively”.

As a result the company is now looking at open radio access networks (open RAN or O-RAN) to give it more flexibility in the supply chain. It notes that board member Claudia Nemat, who heads technology and innovation, is now in favour of promoting open standards. She had previously been a strong supporter of Huawei.