Noose tightens on Huawei as chipmakers, Google distance themselves

Huawei
Huawei is feeling the heat from the Trump administration's efforts to curtail the use of its networking gear. (FierceWireless)

The Trump administration's ongoing efforts to throttle the use of some of Huawei's technology in the U.S. and abroad are starting to show results.

Last week, President Trump put Huawei on a trade blacklist that was designed to make it difficult for the world's largest telecom vendor do business in the U.S., while also seeking to influence other countries to take similar measures.

Those efforts started to have traction across the global supply chain as vendors Intel, Qualcomm, Xilinx, and Broadcom told their employees they would no longer supply Huawei until further notice, according to a story by Bloomberg.

FREE DAILY NEWSLETTER

Like this story? Subscribe to FierceTelecom!

The Telecom industry is an ever-changing world where big ideas come along daily. Our subscribers rely on FierceTelecom as their must-read source for the latest news, analysis and data on the intersection of telecom and media. Sign up today to get telecom news and updates delivered to your inbox and read on the go.

Bloomberg reports that Intel is the primary supplier of server chips to Huawei, while Qualcomm's processors and modems are used in many of the vendor's smartphones. Xilinx sells Huawei programmable chips used in networking solutions, and Broadcom is a supplier of switching chips to the Chinese giant, according to Bloomberg.

A Monday story by Reuters that cites Nikkei Asian Review said Germany-based chipmaker Infineon also suspended shipments to Huawei. Nikkei reported that Infineon would hold meetings this week to figure out what it will do with Huawei going forward after it works through some legal issues. Nikkei reported that Infineon’s annual sales to Huawei amount to around $100 million.

While Huawei sorts through its options, the semiconductor vendors will have to adjust their bottom lines going forward to account for the loss of revenues from Huawei.

RELATED: Commerce Dept. bans Huawei, 70 affiliates from sourcing U.S. components

According to another Bloomberg story last week, Huawei has stockpiled enough chips and other components to continue running for at least three months.

There are some in the telecom industry that believe Huawei is farther along with its 5G products and applications than rivals Nokia and Ericsson. The U.S. ban could cause a delay in the buildout of Huawei's 5G network components, according to Bloomberg

Google yanks Android support

On the consumer front, Google is no longer allowing access to software updates for its Android operating system and apps that are used in Huawei's smartphones and tablets, which cuts Huawei's options down to open source technologies. Huawei, the world's second-largest smartphone vendor, is reportedly working on its own operating system for its smartphones.

In a statement, Huawei noted that it has "made substantial contributions to the development and growth of Android around the world," and that it would continue to provide security updates and after-sales services for all existing smartphone and tablet users going forward.

The battle with Huawei and the U.S. has been brewing for some time, but it started to heat up last year as the Trump administration's trade negotiations with China soured. Huawei has maintained that it's a pawn in the trade negotiations, and that it doesn't provide technology secrets to the Chinese government via backdoors in its products and applications.

Huawei's gear has been used by several small U.S. telcos, such as Eastern Oregon Telecom, but the larger carriers don't have it in their core networks today.

"The sudden and daily changing regulations on Huawei are certainly a hardship for some of the smaller carriers with an installed base," said Scott Raynovich, founder and chief analyst of Futuriom. "Going forward, they will work with the government toward some sort of regulatory relief."

Suggested Articles

To better gauge which rural areas in the U.S. lack broadband services, FCC Chairman Ajit Pai is proposing a new mapping process.

VMware announced Thursday afternoon that it was buying application delivery controller startup Avi Networks, but it didn't disclose the financial terms.

Google continues to execute on its $13 billion U.S. investment plan by announcing on Thursday that it's expanding a data center in Oklahoma.