Leading technology companies in the US have started to cut off supplies to Chinese telecommunications equipment supplier Huawei, according to Bloomberg.
US chipmakers such as Intel, Qualcomm, and Xilinx are reported to have said they will not supply Huawei until further notice.
Meanwhile, Google is reported by the Wall Street Journal to have banned Huawei from using some services in its version of the Android operating system for smartphones.
All this pressure on Huawei has come about because the administration of US President Donald Trump is said to be concerned about Huawei spying on the country.
Last week, Trump signed an executive order which, although it didn’t name Huawei, is widely thought to be aimed at the Chinese company.
The order effectively banned Huawei from doing business in the US, and discouraged US companies from doing business with Huawei.
Huawei is one of the leading global suppliers of equipment for constructing fifth-generation telecommunications infrastructure, or 5G.
But the Chinese company’s interests are extensive. It also makes its own brand of smartphone.
Moreover, senior Huawei executives say the company has been preparing contingency plans for just such a situation.
Huawei has been stockpiling on components it may need in the event of a ban, and has also developed microprocessors and an operating system of its own.
It’s difficult to say which side will come off worse as a result of the ban, especially since many US tech companies have previously relied on Huawei for the supply of components critical to their own products.
However, there’s no doubt that Huawei will be directly affected, although the company has tried to play down the potential damage, saying that its business is not dependent on the US market.
Huawei argues that its global success is the reason behind the US ban, claiming that its 5G equipment is cheaper and more powerful than that of competitors.
The company is also believed to be one of the three largest smartphone manufacturers in the world, along with Samsung and Apple.
That may be the situation now, but after this ban by Trump, it’s difficult to see Huawei maintaining its position, especially as European companies appear to be following the US.
In the latest development, as reported by Nikkei, German chipmaker Infineon is said to have suspended the supply of components to Huawei.
Infineon is one of the largest suppliers of chips to the automotive industry. But then, Intel, Qualcomm and the others that are now reviewing their business with Huawei are also leaders in one sector or another.
Huawei’s chipmaking arm, HiSilicon, may have to accelerate development of its Kirin chip, which the company says can compete with the leaders in the market.
But only time will tell if that happens, especially as the new generation of microprocessors on the market are designed to better manage artificial intelligence workloads.
A lot is likely to be changing in the chipmaking industry over the next year or two, especially if large companies like Apple decide to use their own, in-house built chips instead of buying them in from suppliers.
