Huawei Expects Continuing Problems With US Sanctions; Biden Hosts Supply Chain Summit
Huawei doesn’t expect to make rapid progress with President Joe Biden's administration on U.S. sanctions, Rotating Chairman Eric Xu told analysts Monday in a streamed presentation. Huawei faces challenges due to the COVID-19 pandemic, geopolitics and U.S. sanctions, Xu said. Meanwhile, Biden hosted executives from AT&T, Google, Intel, automakers and other tech companies for a virtual discussion of supply chain issues. Xu said the U.S. is responsible for supply disruptions.
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Acting to protect the semiconductor supply chain has bipartisan support, Biden said. China is investing in semiconductors and batteries, and “so must we,” he said. “Chips or batteries, broadband, it’s all infrastructure,” he said: “For too long as a nation, we haven’t been making the big, bold investments we need to outpace our global competitors. … To put it bluntly, we have to step up our game.”
The U.S. imposed three rounds of sanctions against Huawei over the past two years, which did "significant damage to our business,” Xu said. “It has caused even greater damage to the global semiconductor industry,” he said. U.S. bans “effectively disrupted trust throughout the industry's global supply chain, forcing more countries and regions to think twice about supply chain security.”
“Despite whatever has been put in front of us,” the Chinese giant has worked with administrations globally and its customers “to demonstrate how you can trust our products,” Paul Scanlan, chief technology officer of Huawei’s Carrier Business Group, told reporters. “Where there is no political intervention, we’re loved by everybody.” Getting the maximum out of 5G will require global cooperation, Scanlan said. “We do have to trust,” he said: “You fear what you don’t know.” Huawei has a few hundred employees in the U.S. but has been reducing staff as a result of sanctions, officials said.
Xu said Huawei will spend $1 billion this year researching self-driving and electric-car technologies and is starting to define 5.5G. Huawei will partner with three Chinese automakers initially to make self-driving cars that carry the Huawei name as a sub-brand, Xu said. “China adds 30 million cars each year, and the number is growing,” he said: “Even if we don’t tap the market outside of China … that’s already a very big business.” Huawei’s focus is driving software that “can make truly autonomous cars a reality,” he said.
The global 5G rollout has exceeded Huawei’s expectations, with more than 145 networks deployed worldwide, Xu said. But to be a success, carriers need to work on making it more attractive to businesses and consumers, he said: “In 2021, our main task is to adapt to key industry requirements, such as highly reliable network connections, large uplink capacity” and improved latency.
Automakers are adept at making engines and other vehicle components, Scanlan said. “They need batteries, they need power management … they need 5G, they need IoT, and that’s what Huawei makes.”
Scanlan also questioned the concept of open radio access networks, as it’s being promoted by the U.S. government. U.S. officials see ORAN as an alternative to buying gear from Chinese suppliers. “You can’t have three or four different companies because who is going to have responsibility for the end-to-end” network, he said. ORANs will take years to develop and deploy, he said. “Open RAN in 5G, I don’t really think so,” he said: “It’s not that Huawei is scared of it.” He noted Huawei is doing tests.
Biden wants "to hear directly from companies about the impacts and what would help the most," White House Press Secretary Jen Psaki told reporters before the summit, most of which was closed. “There’s an agreement on this issue being one that’s impacting industries across the country,” she said.