Jun 19th, 2019

The trade ban imposed on Huawei by the U.S. government will certainly take a huge tole on Huawei’s profitability and growth over the next few years, but the impact could be devastating to U.S. based chip makers like Qualcomm and Intel as well. In 2018 alone, Huawei spent upwards of $11 billion purchasing components built by companies like Intel, Qualcomm and Micron Technology, money Huawei will now spend on components most likely built by Chinese competitors since it is no longer able to do business with companies in the United States.

While these American companies are not disputing the government’s claims that Huawei poses a security risk, they have secretly been meeting with Commerce Department and other agencies to hopefully find a solution which would allow them to continue to do business with Huawei.

Huawei trade ban recap: everything you need to know

As you can imagine, Huawei is looking to resolve the trade ban issue as well, but Andrew Williamson, Vice President of Public Affairs at Huawei, has stated that the company has not asked any of U.S. companies to lobby on its behalf. Any efforts to get the ban lifted by Intel, Qualcomm or other chip makers is purely based on their own agendas since they will lose out on billions of dollars in revenue. Huawei’s smartphone business is projected to shrink by up to 60% due to the trade ban, but the company will likely remain a dominant player in China and a handful of markets across Asia even if it’s not able to do business with U.S. companies.

Source: Reuters

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