SAN FRANCISCO/WASHINGTON - The impact of the Trump administration's threats to choke Huawei Technologies Co. reverberated across the global supply chain on Monday, hitting some of the biggest component-makers. Germany's Infineon Technologies AG fell in early trading Monday after the Nikkei daily reported it halted shipments to the Chinese company in the wake of the U.S. ban. Shares of STMicroelectronics NV were also hit. The share-price falls follow U.S. corporations freezing the supply of critical software and components to China's largest technology company, in order to comply with White House orders. Chipmakers including Intel Corp., Qualcomm Inc., Xilinx Inc. and Broadcom Inc. have told their employees they will not supply Huawei till further notice, according to people familiar with their actions.
BEIJING – For nearly a decade, Huawei kept its worldwide sales growing even as Washington told U.S. phone companies not to buy its network equipment and lobbied allies to reject China's first global tech brand as a security threat. Focusing on Europe, Asia, Africa and China's booming market, Huawei became the biggest maker of switching gear and a major smartphone brand. As the White House cut off access to American components and Google's popular music and other smartphone services, Huawei unveiled its own processor chips and app development. Last year's sales rose 19 percent to $123 billion (¥13 trillion). But now Huawei Technologies Ltd. is suffering in earnest, as Washington intensifies a campaign to slam the door on access to foreign markets and components in its escalating feud with Beijing over technology and security.
Huawei has announced a full-year net profit of 47.5 billion yuan for 2017, up 22.7 percent from the 37.1 billion yuan reported a year earlier, attributing the result to its smartphones, enterprise solutions, and the digital transformation across industries. The Chinese networking giant brought in 603.6 billion yuan ($92.5 billion) revenue during the year, up 15.7 percent from 521.6 billion yuan in 2016. A breakdown of its revenue saw its carrier business grow by the smallest amount, rising by just 2.5 percent year on year to bring in 297.8 billion yuan. "Through advancements in technology like 5G, we are helping telecom networks connect more people, more homes, and more organisations. Ultimately, we aim to position telecom networks as the basic infrastructure of the digital world," Huawei rotating CEO Ken Hu said in the results report [PDF], with Huawei unveiling its first 5G customer premises equipment during MWC in February.
As the world watches to see if Huawei Technologies Co. survives the ongoing turmoil stemming from the U.S.-China trade war, wider implications are likely to hit Japan if the Chinese telecom giant continues to be blacklisted by Washington. The move by the administration of U.S. President Donald Trump to put the firm on the so-called Entity List, effectively barring it from doing business with American firms without government approval, could severely harm Huawei's ability to manufacture and market its products, including smartphones. Consequently, the Japanese smartphone market is likely to see a change in the balance of power with the looming troubles facing Huawei, which had boosted its presence in the country in recent years, industry observers said. Japanese makers of electronic components that supply their products to Huawei may also take a hit from the potential loss of business with the world's No. 2 smartphone-maker. "If this situation continues, it will severely hit Huawei's smartphone unit sales," said Hideaki Yokota, director and executive analyst at MM Research Institute, a Tokyo-based mobile-industry research firm.
BARCELONA, SPAIN - A global battle between the U.S. government and Chinese tech company Huawei over allegations that it is a cybersecurity risk overshadowed the opening Monday of the world's biggest mobile industry trade fair. Huawei has an outsize presence at MWC Barcelona, from its displays in three separate show halls down to its red sponsorship logo adorning visitor pass lanyards. The focus at this year's meeting is new 5G networks due to roll out in the coming years. The United States government dispatched a big delegation to press its case with telecom executives and government officials that they should not use Huawei as a supplier over national security concerns. U.S. President Donald Trump's administration says the Chinese government could use Huawei equipment to snoop on the world's internet traffic -- accusations Huawei has rejected, saying there has been no proof of a cybersecurity breach.