Trump Ban To Bring Huawei's Supply Chain To Its Knees In Record Time

The executive order President Trump signed last week in order to prevent American companies from doing business with any foreign entity deemed to be a national security threat is extremely likely to bring Huawei's global supply chain to its knees in record time, as some industry analysts are now openly speculating.

While the big news from the weekend is that Google started complying with the new administration's new limitation and halted the majority of technology supplies it regularly sends to Huawei, both in terms of hardware and software licenses, other giants from the segment such as Qualcomm, Intel, Broadcom, and Xilinx are now understood to be following suit. In other words, following less than a single full working day since the White House blacklisted Huawei, the largest American companies upon which the Shenzen-based conglomerate depends on for many key technologies — even as so much of its manufacturing practices and virtually all of its assembly operations are run in-house — managed to start complying with the vast majority of the new rulebook.

How permanent the regulatory change in question is remains to be seen but things certainly aren't looking great for Huawei right now.

A(nother) point of no return

It's not like Huawei wasn't expecting the ban at all; even if it wasn't for the trade-related tensions that have been ongoing between Washington and Beijing for over a year now, having already resulted in tens of billions of dollars' worth of tariffs on hundreds of millions of dollars in goods, the firm has the exact opposite of a stellar track record when it comes to dealing with a long string of U.S. administrations. Democratic and Republican governments alike were previously reluctant to allow it to do large-scale business in the country and given the advent of 5G which blurs the lines between private and national networks, allowing for unprecedented access with a high potential for abuse to anyone that operates even portions of such infrastructure, Huawei unsurprisingly isn't America's top candidate for a 5G provider; or a provider of anything else, really.

With its access to a West-friendly Android license being cut off, the company is expected to half all planned smartphone and tablet releases outside of its home country, the only market where its devices already lack popular frameworks and apps such as Google Play Services and the Play Store. In other words, this is looking like a repeat of the situation ZTE found itself in last year, though what requires highlighting is that Huawei is believed to have much larger cash reserves and a significantly more diversified business model.

Sure, being forced to shutter its global smartphone operations and portions of its wireless hardware unit would be a massive blow to the firm, yet it likely wouldn't be a deadly one, and that's assuming the Friday blacklisting is long-term in nature, which almost certainly isn't the case. President Trump is believed to be using the move as a negotiating tactic, though his attempts to bully Beijing into compliance during the trade negotiations that took place over the last year or so did not really amount to anything.

Still, this is another line the U.S. now crossed that may bite it back at some point in the future, with Huawei already internalizing much of its chip production and now being expected to do the same on the OS front, even if doing so takes years. That road may ironically lead to Google's grasp on the global smartphone market weakening at a time when a saturated supply is becoming quite a significant problem.

Copyright ©2019 Android Headlines. All Rights Reserved
This post may contain affiliate links. See our privacy policy for more information.
You May Like These
More Like This:
About the Author

Dominik Bosnjak

Senior Writer
Dominik started at AndroidHeadlines in 2016. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]