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Huawei
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Huawei faces ‘impossible’ challenge after latest US tech sanctions, say analysts

  • The battleground in the US-China tech war has widened from semiconductors and next-generation 5G wireless networks to apps and cloud services in recent weeks
  • On Monday the US Commerce Department added another 38 Huawei affiliates to its Entity List, banning them from purchasing US products

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Huawei's newest flagship store is in Shanghai. Photo: EPA-EFE
Jane ZhangandChe Pan
After the US further tightened restrictions on Huawei Technologies’ access to semiconductors on Monday, analysts had only one word to describe the situation faced by China’s telecoms champion: impossible.
The new rules, designed to prohibit Huawei from bypassing earlier sanctions by sourcing products via third party buyers, will essentially choke off the company’s ability to acquire semiconductors developed or produced using US technology.

“It’s hard to imagine how Huawei can turn the tables now,” said Yang Guang, director of service provider research at Strategy Analytics. “All the power of one company cannot build the entire industrial chain by itself. It is impossible.”

The latest move from the Trump administration further complicates the battleground in the US-China tech war, which has widened from semiconductors and next-generation 5G wireless networks to apps and cloud services in recent weeks.

With its avenues for sourcing critical semiconductors to power its 5G base stations, smartphones and now its cloud computing business shut off, analysts said there were very few options left.

Unless US suppliers can obtain licence approvals to resume selling to the Chinese company, “the new restrictions have critically damaged Huawei's supply chain, especially chipsets for its smartphone and cloud business, as well as its innovation lab operations worldwide,” according to Charlie Dai, principal analyst at Forrester.

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