Cutting off Huawei could kill it, or kill tech monopolies

by Steve Blum • , , , ,

Huawei press conference ces 6jan2014

Conventional wisdom is that Huawei can’t survive without access to U.S. technology. It was cut off from access to U.S. customers and vendors last week, although the toughest sanctions were delayed for three months earlier this week. If and when those sanctions take full effect, two companies – ARM and Google – say they’ll stop selling Huawei licenses to use two essential building blocks of the mobile industry – ARM’s chip designs and Google’s Android ecosystem. Huawei could be cutoff from similarly essential technology in other industry segments, for example the Windows operating system.

It’s dangerous to assume, however, that any company, let alone one as big and ambitious and well supported as Huawei will just roll over die. The company has said it’s kept a Plan B on the back burner for several years, which require it to launch its own operating system, to replace Android and Windows, and develop advanced chip technology in house.

There’s a lot of skepticism about a Huawei OS. The assumption is that it would be based on the open source bits of Android, but wouldn’t be able to gain any more uptake than past alternate mobile OS attempts, such as Tizen, Firefox or Sailfish. The counter argument is that the Chinese market is already semi-isolated from the global app and service ecosystem. If Huawei gets developer support and user adoption on its home turf – not a far out possibility – it could become the mythical third mobile OS that so many competitors – Microsoft, Nokia, Samsung, Canonical, Mozilla, [Blackberry] –(https://www.tellusventure.com/blog/blackberry-shares-the-big-one-with-the-cops/) have failed to capture.

Chipsets are a tougher problem, but there could be hardware workarounds, according to a TechRepublic article by James Sanders

In terms of hardware, Huawei is far from self-sufficient. Their HiSilicon division licenses the Arm ISA for use in Kirin smartphone SoCs and Kunpeng server CPUs. HiSilicon already possesses the requisite information to manufacture chips based on the technology, and they can continue to design ARMv8-powered chips without the involvement of Arm Holdings, which has cut ties with Huawei. The actual production of these is handled by TSMC, which is one of the few organizations continuing work with Huawei…

There are still options for Huawei…Samsung, LG, and BOE are potential vendors for displays, and Sony and Leica can provide lenses and sensors for cameras. Flash storage and RAM may be an issue, as Toshiba and Micron are used, though SK Hynix provides RAM on some devices, and Samsung can likewise supply both.

It’s too soon to know with any degree of certainty how this battle in the U.S.-China trade war will play out. It could just be another round of brinkmanship, and president Donald Trump has all but admitted that’s what this is all about. But if it isn’t, the result could be a global scale competitor to some cherished de facto technology monopolies, which are either based in the U.S. or dependent on intellectual property that’s rooted here. That would be good for the market, but it’s not exactly what the Trump administration has in mind.