Huawei’s chairman says that sourcing chips is its biggest problem
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Let’s use our imagination a little, shall we? Had the U.S. not placed Huawei on the Entity List for security reasons in 2019 and followed that up exactly a year to the day by changing Export rules banning Huawei from receiving chips from certain foundries using American technology, the smartphone market “league tables” would be different. Huawei would not have sold sub-brand Honor and would most likely be the top handset manufacturer on this planet.
But the truth brings a harsher reality to Huawei as the manufacturer is predicted to finish the year as the seventh-largest smartphone shipper with Honor right behind it. Still, the company’s current rotating chairman (the position rotates, not the actual executive) Guo Ping is determined that Huawei will never drop out of the smartphone industry. Citing the U.S., Guo says that the policies of individual countries have no impact on Huawei’s place in the world and the firm will never limit its business to selling in China only.
This morning, Guo told new Huawei employees that “The U.S. has created many difficulties for Huawei but they are solvable. It is in the supply chain where the US has a big impact on Huawei. We need more investment and innovation to deal with the US sanctions. Huawei has established and helped its industrial chain partners to solve the problems of supply continuity and competitiveness.”
The Chairman said that Huawei employees should have the attitude that “what does not kill me makes me stronger,” and added that “if every employee works diligently and effectively and makes achievements, Huawei will become better and the U.S. will not be able to beat us.” For those who believe that the company should give us its mobile phone business, ponder this statistic.
After real estate and automobiles, the mobile phone sector is the third-largest “industrial sector” in the world. This calls to mind the famous quote from bank robber Willie Sutton who was once asked why he robbed banks. “Because that’s where the money is,” was his reply. Why should Huawei give up on making phones when it still is where plenty of money lies.
“will not be able to beat us.” For those who believe that the company should give us its mobile phone business, ponder this statistic.”
While being placed on the Entity List makes it hard for Huawei to access the U.S. supply chain, Guo says that the major issue affecting Huawei is its inability to buy chips. The chairman says, “At present, the biggest difficulty for us is the mobile phone business. As we all know, chips for mobile phone need advanced technology as they are small and have low power consumption. Huawei can design its own chip but no one can manufacture it for us. That’s where we (are) stuck.”
As a country, China has been hoping to become self-sufficient when it comes to manufacturing chips. This would prevent tech companies in the country from having to worry about having their businesses held hostage. “Technology should be used to give full play to its value. It is imperative to combine 5G with artificial intelligence, cloud and enterprise application scenarios to unleash the potential of Internet of Everything and Intelligence of Everything,” said Guo.
“Huawei phones have a lot of unique technologies of their own. We are looking forward to the day when the core problem of chip manufacture will be completely solved in China,” Huawei’s current chairman states. Huawei’s Chairman is also thinking ahead about 6G. He sees 5G becoming the universal global network that most people envision it becoming. But as for 6G Guo, sees the next generation of wireless connectivity being used as a regional network for industrial use.
Questions & Answers
Q.What is the primary challenge Huawei faces in its mobile phone business?
What is the primary challenge Huawei faces in its mobile phone business?
The biggest difficulty for Huawei is its inability to purchase chips. Although Huawei can design its own chips, it cannot find a manufacturer due to advanced technology requirements, leaving it stuck in the supply chain.
Q.Why does Huawei's chairman believe the company should not exit the smartphone industry?
Why does Huawei's chairman believe the company should not exit the smartphone industry?
The chairman notes that the mobile phone sector is the third-largest industrial sector globally, after real estate and automobiles. He states that plenty of money remains in the smartphone business, making it a valuable area to continue in.
Q.What is Huawei's current stance on its global business aspirations despite US policies?
What is Huawei's current stance on its global business aspirations despite US policies?
Huawei's chairman states that individual countries' policies have no impact on the company's global standing. The firm is determined not to limit its business to selling only within China.
Q.How does Huawei plan to address the difficulties created by US sanctions?
How does Huawei plan to address the difficulties created by US sanctions?
Huawei plans to deal with US sanctions through increased investment and innovation. It has also established and supported its industrial chain partners to ensure supply continuity and competitiveness.
Reader pulse
Huawei's future depends on solving its chip supply issues. Do you think they can?
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