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Tuesday 20 August 2019
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US gives Huawei the cold war shoulder

Mark Lyndersay
Mark Lyndersay

BitDepth#1198

HUAWEI’S problems with the US government reached a critical point last week when the company was put on the Entity List, a document that lists companies that US firms cannot do business with unless they have a special government licence.

The Trump administration first declared a limited national emergency, allowing the secretary of commerce to block technology transactions that were deemed national security risks.

Then it put Huawei on the blacklist.

Huawei has since been granted a 90-day limited reprieve that allows it to push updates to existing phones.

Google was the first company to go public about curtailing business with the Chinese company.

Other companies, notably chipmakers Intel and Qualcomm, then announced they would no longer supply Huawei with their hardware designs.

It’s the most powerful salvo yet in a quiet but undeclared war by the US on China’s ascendancy in technology, and while much is being made of Huawei’s mobile phone business, the target is likely to be much bigger.

Huawei has set sales revenue this year at US$125 billion and expects some of that revenue to come from 5G infrastructure. It has been waiting to roll its technology out globally as the migration from 4G begins.

TT has long been an infrastructure customer of Huawei, which has operated locally for the last 13 years and built large chunks of this country’s 3G and 4G network.

The first response to this rising tech profile was an accusation that the company’s hardware was capable of spycraft through hard-coded back doors. That has not been conclusively proven to date with any public revelations and similar backdoors have been found in US built equipment (http://ow.ly/DDFO30oMWeK).

Much of the fear surrounding these claims was stirred by an October 2018 Bloomberg article (http://ow.ly/gOxE30oMWyQ) which told the story of tiny chips built into Supermicro server motherboards in China that left them vulnerable to attack and control.

Then Huawei’s chief financial officer Meng Wanzhou was arrested six months ago in Vancouver, Canada, on charges of bank fraud, wire fraud, and violating US sanctions on Iran. She has been under house arrest in Canada ever since.

Huawei may not say much in its press releases (http://ow.ly/iDnP30oMWSB), but it acts quickly and decisively. By March, it had opened the Huawei Transparency and Cybersecurity Center in Brussels, keen to allay fears through more open operations.

These actions won’t help the company if it is being used as the nail to hammer home US displeasure with China’s business growth and strides in the technology sector.

China, it should be noted, has long frozen out US tech companies, including Google and Facebook, supplanting those services with homegrown alternatives and operating parallel internet services for decades.

Huawei has been stockpiling critical parts from US companies, but without access to current Android updates, the Play Store or Google’s popular apps, the company will be forced to either leave the mobile market or design and build its own internal chips and software service platform. The company manufactures the Kirin processor used in most of its phones, so it is certainly capable of doing both, but that solution doesn’t help with its plans for 5G hardware dominance.

In a March interview with Germany’s Die Welt (http://ow.ly/vGv030oMXSX), Huawei’s Richard Yu announced bluntly that the company has a replacement OS for both Android and Windows, one it has been developing since its troubles began in 2016.

That may allow Huawei to survive, but it will also sow the seeds of further balkanisation of technology platforms, which won’t serve technology’s growth and evolution.

Mark Lyndersay is the editor of technewstt.com. An expanded version of this column can be found there

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