As expected, more U.S suppliers are now complying with the trade ban and stopping business with Huawei. These companies include Qualcomm, Intel, Broadcom and Xilinx according to Bloomberg.
This now throws the whole toolbox into into Huawei’s works and let me try and break down why.
The Huawei Ecosystem
Huawei has been working hard on their Ecosystem of devices. This includes Smartwatches powered by Qualcomm processors, laptops powered by Intel processors and some networking cards powered by Broadcom chips.
You see where i’m going with this? While Huawei’s flagship and upper-midrange smartphones utilize their in house processors, a good amount of their lower end smartphones make use of either Mediatek processors or Snapdragon processors.
Their laptops are also facing a bleak future considering that almost all the big names in computing chips are in the U.S. Intel, AMD, Nvidia are all Silicon valley companies and so if Huawei is to resume with these devices it has it’s work cut out for it to find either replacement suppliers or build a new factory.
Is Huawei Done For?
Not really. In fact far from it. Considering the fact that Huawei threw a cool US$15 billion into R&D in 2018 which was more than Apple, Intel and Microsoft just to name a few.
With such a budget as well as their own in-house developments like the Kirin mobile processor and the Balong 5000 5G modem, Huawei already has a starting point to produce it’s own components.
Europe is also showing Huawei some love as they refused to join the U.S in closing doors for Huawei. Countries like Germany, Netherlands and France openly said they will allow Huawei to handle 5G expansion in their countries and ignore US’ plight.
That doesn’t remove from the fact that this trade ban will lay down anchor on Huawei’s rate of growth in the near future and probably see a drop in revenue for the tech giant. Like it or not, Silicon valley has the best silicon.
Other US Companies That Might Also Pull Out?
The trade ban in simple terms is not allowing any U.S company to trade with Huawei unless if they seek permission…Which they can be denied.
This now leaves major companies like Microsoft and Nvidia who still have not confirmed that they are pulling the plug on Huawei. Them pulling out means no more PC OS for the Huawei laptops and no more high performance graphics cards as well.
Their audio department might also be losing Dolby audio enhancement support on future devices since Dolby is also an American company.
There are reports that Huawei was working on it’s own operating system so it shall be interesting to see how the company will navigate round this trade ban.