After 5G, the United States attacks Huawei on 4G, Wifi and the cloud

After 5G, the United States attacks Huawei on 4G, Wifi and the cloud

Posted Jan 31, 2023, 11:19 AM

Barely out of a crisis mode, Huawei is not immune to plunging back into it immediately. According to the Anglo-Saxon press, the Chinese telecom giant remains at the heart of the discussions of the American administration on new measures against the tech of the Middle Empire.

In the continuity of the trade war waged against Huawei and China since 2019 under the presidency of Donald Trump, Joe Biden’s teams are considering expanding the list of technologies that American companies are prohibited from selling to the Shenzhen group. Always suspected of cooperating with the Chinese secret services and so far deprived of key American components for 5G and artificial intelligence, Ren Zhengfei’s company could also be denied the bricks necessary for these products connected in 4G or Wifi. and essential to its online computing services (cloud computing).

The “new normal” of restrictions

According to Bloomberg and the Wall Street Journal, these measures are still being debated by the Commerce Department, which could formalize its position next May, four years after the establishment of an export licensing mechanism allowing the US administration to block certain sales to Huawei. But Reuters and the Financial Times ensure that the veto is already systematically opposed. Until now, groups like Qualcomm or Intel had, for example, had no problem supplying Huawei with 4G components, even if the latter is no longer the big customer it was for American chipmakers.

This new American turn of the screw would cut short the recent satisfaction of the leaders of the Chinese group. “American restrictions are now our new normal,” said Eric Xu, the current president of Huawei, bravado when he presented encouraging annual results last December. After a heavy fall in 2021 (-28.5%), the group stabilized its revenue in 2022, at 637 billion yuan, or the equivalent of 86 billion euros.

Supply threatened

Strongly supported by the Chinese government, Huawei has been able to find in its country alternatives to American components in sufficient quantity to continue to participate in the deployment of the Chinese 5G network, the largest in the world. But abroad, where many 5G markets are prohibited – or as in France, partially closed – the group’s performance is precisely due in large part to the sale of less state-of-the-art equipment. In particular 4G antennas, routers, servers or computers made from American components whose supply is now threatened…

Smartphone sales, on the other hand, have become starved. Gone are the days when Huawei was still allowed to rely on Google’s Android operating system and was in the running for the title of world number one in this huge market. To compensate for its losses, Huawei is accelerating the exploitation of its patents with third parties and has also embarked on a diversification strategy, ranging from solar energy to charging stations for electric vehicles. Areas for the moment spared by the American regulatory offensive.

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