(Noted News) — As year-old sanctions begin to take their toll, the world’s largest maker of smartphones and telecommunication devices is having to think of new ways to maintain business.
In the war for control over the world’s data, Washington targeted Huawei with sanctions in 2019 because of concerns that their devices were providing backdoors to Chinese intelligence in Beijing.
The bulk of the sanctions are essentially a ban on any American technology being used in Huawei’s devices, including Google’s Android system, and the crucial semiconductors needed for any smartphone. Some analysts call it a “lethal blow” to the Chinese tech giant, because not only do the sanctions essentially force them out of the USA, they also complicate their operations in Europe, which partly rely on the American components.
In an interview with German paper Kurier, Huawei’s representative for Europe Abraham Liu said he never expected Huawei to get into this mess.
“When it comes to cybersecurity, Huawei has the best track record: there have been many cyber accidents and attacks, but we haven’t been involved in any. Now the superpower USA is making these allegations and lobbying against us.”
“We never expected to get involved in such political discussions or to deal with geopolitical attacks by the US.”
Becoming a target in the power struggle between the USA and China is just the price for being successful, Liu said.
“That is obviously the price to be paid for being so successful. We didn’t do anything wrong. Most of the world continues to follow multilateralism, so we shouldn’t lose hope in the long run. But there is turbulence in the short term.”
“There is a tremendous effort on the American side to achieve technological supremacy in the 5G or 6G era. That is why they are motivated to push other competitors against the wall. It’s about future global technological competition.”
The lack of access to American semiconductors has thrown a wrench in Huawei’s entire business model, and they are still struggling to find a way around it. Liu does hope, however, that the companies foothold in Europe will manage to survive.
“Since the U.S. sanctions last year, U.S. manufacturers of semiconductors are no longer allowed to supply us so our previous U.S. partners can no longer work with us. Since August it has become even more difficult.”
“Nevertheless, we are confident that we can continue to serve our European customers in the 5G sector because of many preparations and upfront investments with the most advanced technology.”
Huawei’s hold in Europe may also prove to be unstable though, as not all EU members are on board with the Chinese company.
In September, Huawei failed its security clearance in the Czech Republic because the Czech Cyber and Information Security Agency deemed Huawei software and hardware as products that posed a security risk.
In January, the European Commission recommended to EU member states that they not allow high-risk companies to get involved with sensitive components of the 5G networks, though the final decision is left up to the individual countries.
Poland is also echoing the American sentiments of completely cutting Huawei out of their markets, while France has announced plans to slowly phase them out in the next 10 years.
With Google being banned from working with Huawei, and American suppliers of semiconductors being banned from selling to them, the Chinese company is holding on to a precarious, fragmented position in the European market for 5G operations. As for cellphone owners, Abraham Liu said they are still trying to figure that out.
“As for private customers, cell phone owners, we see great difficulties. There are 90 million European Huawei users. Google is no longer allowed to work with Huawei, so Google will no longer publish updates for Huawei smartphones with the Android operating system. We are still looking for a solution.”
Once trading at above $14, Huawei’s share price is now below $3, with the bulk of the bearish collapse starting right after Donald Trump won the presidency.