News ID: 253126
Published: 0941 GMT May 21, 2019

Huawei founder says US underestimates company

Huawei founder says US underestimates company
DADO RUVIC/REUTERS

Huawei founder, Ren Zhengfei, on Tuesday shrugged off US attempts to block his company's global ambitions, saying the US underestimates the telecom giant's strength.

Ren spoke to Chinese media days after President Donald Trump issued orders aimed at thwarting Huawei's business in the US, the latest salvo in a months-long effort to stop the company's charge to the top of the leaderboard in next-generation 5G technology, AFP reported.

"The current practice of US politicians underestimates our strength," Ren said, according to transcripts from state-run media.

"Huawei's 5G will absolutely not be affected. In terms of 5G technologies, others won't be able to catch up with Huawei in two or three years," he said.

Last week, Trump declared a ‘national emergency’ empowering him to blacklist companies seen as "an unacceptable risk to the national security of the United States" — a move analysts said was clearly aimed at Huawei.

At the same time, the US Commerce Department announced an effective ban on American companies selling or transferring US technology to Huawei.

 

'Can't be isolated'

 

US internet giant Google, whose Android mobile operating system powers most of the world's smartphones, said this week it was beginning to cut ties with Huawei in light of the ban.

The move could have dramatic implications for Huawei smartphone users, as the telecoms giant will no longer have access to Google's proprietary services — which include the Gmail and Google Maps apps — a source close to the matter told AFP.

But the Commerce Department on Monday issued a 90-day reprieve on the ban on the transfer of technology by allowing temporary licenses.

"The US 90-day temporary license does not have much impact on us, we are ready," Ren said.

Huawei has sought to ease customers' concerns over the Google announcement.

Ren said Huawei and Google are discussing how to respond to the ban, calling the US firm a ‘highly responsible company’.

A company spokesman in Australia said the US actions ‘will not impact consumers’ with a Huawei tablet or smartphone in the country, or those planning to buy a device in the future.

As for Huawei's access to key components, Ren said half of chips used in the company's equipment come from the US and the other half it makes itself.

"We cannot be isolated from the world," Ren said.

"We can also make the same chips as the US chips, but it doesn't mean we won't buy them," he said.

He denied reports that German chipmaker Infineon has halted shipments to Huawei.

But analysts say the ban threatens the company's very survival as it heavily relies on US components.

"If the ban continues, Huawei will be damaged for sure, particularly in smartphones but also in the datacenter and networking markets," said Patrick Moorhead of Moor Insights & Strategy.

The Huawei confrontation has been building for years, as the company has raced to a huge advantage over rivals in next-generation 5G mobile technology.

US intelligence believes Huawei is backed by the Chinese military and that its equipment could provide Beijing's intelligence services with a backdoor into the communications networks of rival countries.

For that reason, Washington has pushed its closest allies to reject Huawei technology, a significant challenge given the few alternatives for 5G.

 

5G license

 

InterDigital Wireless Inc., meanwhile, said on Monday that it can license its 5G network technology to Huawei Technologies Co. Ltd. despite the threat of a US ban on selling chips and software to the Chinese firm, and patent attorneys said Qualcomm Inc. likely also can do so.

InterDigital and Qualcomm are the two major American holders of patents for wireless networking technology, including the 5G networks rolling out this year in China, Reuters reported.

InterDigital, which generates revenue by developing wireless technologies and then licensing out the patents, said it believes it can continue its efforts to strike a 5G deal with Huawei because export control laws do not cover patents, which are public records and therefore not confidential technology.

“The addition of Huawei to the Entity List does not prevent InterDigital from entering into a patent license agreement with Huawei, because our patents cover technologies that are publicly available and therefore outside the scope of US export control laws,” InterDigital spokesman Patrick Van de Wille told Reuters in a statement.

Qualcomm did not respond to a request for comment. But trade attorneys said the situation is likely the same for the San Diego-based company. Qualcomm also sells chips to Huawei, but only for Huawei’s lower-priced handset. It generates most of its profits from patent licenses.

“If you’re giving Huawei rights to your patents, all that means in effect is that you’re not going to sue them,” said Erick Robinson, a partner with Dunlap Bennett & Ludwig who formerly worked as a patent attorney for Qualcomm in China. “You’re not passing on any information whatsoever.”

Huawei, the world’s third-largest smartphone provider and also a major provider of telecommunications gear, is a big customer for both InterDigital and Qualcomm. The Chinese tech firm accounted for 14 percent of InterDigital’s $533 million in revenue in 2017, the most recent year for which figures are available.

Both American companies are in the middle of license disputes with Huawei over 5G technology. Huawei sued InterDigital in China in January, alleging the Wilmington, Delaware-based company was seeking to charge too much for its patents, a claim InterDigital disputes.

Qualcomm has had a patent deal with Huawei since 2014, but Huawei stopped paying in 2017. Qualcomm expects to get $450 million in ‘good faith’ payments this year as the two sides negotiate.

 

 

 

 

 

   
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