Washington has been taking on Huawei for the past 15 years — since it first tried to enter the US market — but it is only in the past week that its chipping away has finally threatened to topple the Chinese telecom company’s business.
Wilbur Ross, US commerce secretary, announced last Monday that companies would have to obtain a licence before selling Huawei any microchip that has been made using US equipment or software.
The much broader restriction on chips at the heart of its telco equipment and phones prompted some analysts to describe it as a “death sentence”, while one European telecoms executive called the prospect of the leading supplier in the market collapsing as “catastrophic”.
Our weekend Big Read explains that no company anywhere in the world can now sell chips to Huawei directly or indirectly if they were designed using software tools made by US companies or manufactured using equipment from US suppliers such as Applied Materials. Taiwan Semiconductor Manufacturing Corp, the world’s largest contract chipmaker, will stop shipping to Huawei on September 15.
While Huawei has been stockpiling chips in anticipation of such restrictions, the Nikkei Asian Review reports both Huawei and its Chinese rival ZTE are slowing down shipments of certain 5G products to buy time, so they can redesign them with fewer or no US components, as part of a “de-Americanisation” effort by China.
The loss of Huawei’s business will be a big blow to many chip companies. Kathrin Hille in Taipei has profiled chip design house MediaTek, which could have sold 60m-70m chipsets to Huawei next year, before the new restrictions, and whose shares are down 15 per cent since last Monday.
Others in the industry could benefit, although our Nordic correspondent Richard Milne reports Nokia’s new chief executive Pekka Lundmark, who took over this month, has a job on his hands in seizing 5G business from Huawei. The Finnish telecoms equipment maker has been slow to develop next-generation network products and the large 5G market in China has proved difficult to crack. It is likely to get harder still as Beijing feels the need to support hard-pressed Huawei.
The Internet of (Five) Things
1. TikTok sues US government
TikTok is suing the Trump administration over its plan to block the Chinese-owned video app in the US. The lawsuit accuses the White House of denying the company due process when the president issued an executive order on August 6. A coalition of WeChat users in the US had already sued the government on Friday, challenging its ban of the messaging app. Lex says limiting access to TikTok and WeChat could cause more disruption to US companies. The Wall Street Journal reports Facebook chief Mark Zuckerberg stoked Washington’s fears about TikTok last autumn.
2. Tata’s super app
India’s Tata Group is pushing into the country’s booming tech sector with a new “super app” that will offer a range of services, including food and grocery ordering, fashion and lifestyle, consumer electronics and consumer durables, insurance and financial services, education, healthcare and bill payments. It would put it in competition with Amazon and Reliance Industries’ Jio.
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3. Microsoft is Epic’s new ally against Apple
Epic’s battle with the App Store has more firepower. Microsoft has agreed with Epic in a court filing that Apple’s threatened suspension of Unreal Engine — a framework used to make games — would create “substantial costs” for itself and other developers, putting projects at risk of being shelved. Apple’s own filing alleged its entire App Store would be placed at risk if Epic was allowed to maintain its operations within the store.
4. Aurora losing its aura
After a wave of consolidation that has seen carmakers opt to build their autonomous technology in-house, Aurora is suddenly the west’s last independent self-driving unicorn standing. With deals struck in recent years between Volkswagen and Argo, Hyundai and Aptiv, and Fiat Chrysler and Google’s self-driving unit Waymo, Patrick McGee in San Francisco reports Aurora is faced with the prospect of developing a hugely expensive technology with no one to sell it to.
5. Mayflower’s maiden autonomous voyage
From self-driving cars to autonomous vessels. John Thornhill looks at the
Mayflower Autonomous Ship, which will attempt to recreate the original voyage of the Mayflower across the Atlantic Ocean 400 years ago. To date, the push for fully autonomous shipping has received less attention and investment than other transport sectors, but it might have the most profound impact of all, he says.
Tech week ahead
Monday: A hearing on Epic's request for a temporary restraining order to prevent Apple carrying out its threat to revoke its support of its Unreal Engine games developer platform is scheduled for 3pm Pacific time.
Tuesday: Contract chipmaker Taiwan Semiconductor Manufacturing Co., takes its annual tech symposium online. Apple AirPod assembler Luxshare-ICT will release second-quarter earnings.
Wednesday: The American Institute in Taiwan, the de facto US embassy, will jointly host a tech forum with Taiwan's foreign ministry and top cyber security chief to promote the Trump administration's Clean Network programme, which aims to safeguard 5G wireless communication. The US has expanded its programme to four fronts, including a crackdown on Chinese companies from Huawei to Alibaba and services from carriers, apps, social platforms and cloud service providers.
Thursday: Like most of the marketing sector, advertising group WPP has been hit hard by the slump in spending during the pandemic, but investors will be on the lookout for how cost-cutting measures are progressing when it reports on its latest quarter. The group has already scrapped its dividend and introduced pay cuts.
Tech tools — Hi-Fi-end smart speakers
Our Interiors team has been looking at high-end smart speakers and I liked the look of the least stylish — the AudioPro Addon C5A (£260). We report this Swedish brand was a pioneer of the powered speaker in the 1970s and its Addon Pro range of portable wireless models are well-regarded for their refined sound and build quality. This 40W unit has built-in Amazon Alexa and a far-field microphone that ensures voice commands are picked out even over loudly playing music.
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