The pressure on Huawei’s global business is growing as foreign partners back away from the Chinese maker of networking equipment and smartphones in the face of U.S. restrictions, Wall Street Journal informs.
U.K.-based chip design company Arm Holdings PLC is suspending its business with Huawei following Washington’s blacklisting of the Chinese technology giant, according to a person familiar with the matter. Meanwhile, mobile-phone carriers in Japan and the U.K. have suspended launches of Huawei smartphone models over concerns that U.S. curbs on exports to the company will jeopardize the phones’ performance.
In addition to being among the world’s biggest suppliers of telecom equipment and smartphones, the Chinese company is one of the most advanced makers of semiconductors. That technology is a national priority for Beijing, but licenses from Arm are crucial to the underlying designs for an array of Huawei-made chips.
A spokeswoman for Arm, which is owned by SoftBank Group Corp. and the Tokyo-based firm’s Vision Fund, declined to comment on the suspension. In a statement, the company said it is “complying with the latest restrictions set forth by the U.S. government and is having ongoing conversations with the appropriate U.S. government agencies to ensure we remain compliant.”
A Huawei spokesman said: “We value our close relationships with our partners, but recognize the pressure some of them are under, as a result of politically motivated decisions. We are confident this regrettable situation can be resolved.”
The company, which recently supplanted Apple as the world’s second-biggest smartphone vendor, has insisted that the U.S. export restrictions won’t have a major impact on its businesses. Its telecommunications equipment has been favored by many carriers worldwide for being both technically advanced and affordable.
The U.S. Commerce Department last week, citing national security, said companies wishing to export U.S. technology to Huawei must apply for a license—which the department indicated would be hard to come by. On the same day, President Trump said he had signed an executive order enabling the U.S. to ban telecommunications network gear and services from “foreign adversaries.”
The executive order added to a campaign by Washington to blunt the emergence of Huawei as a global supplier of telecommunications equipment. The U.S. contends that the company and its equipment are at the disposal of Beijing, and has warned allies against involving the Chinese company in the rollout of next-generation wireless networks. Huawei has long denied allegations that it is under the sway of its government, the Journal adds.
In Japan, wireless carriers KDDI Corp. and SoftBank both said Wednesday they are postponing the sale later this month of the Huawei P30 lite while they gauge the impact of the U.S. restrictions. NTT Docomo Inc., which commands half the Japanese wireless market, said it is considering halting preorders for new Huawei phones, including the P30 Pro.
Panasonic also joined the growing list of companies to sever ties with Huawei by announcing that it will stop supplying some components to the Chinese technology conglomerate, the Guardian added.
Two of the U.K.’s biggest carriers said they were removing Huawei phones from their plans for rolling out 5G wireless networks, the Journal noted.
The worsening standoff between the two economic superpowers pushed Asia Pacfic shares to their lowest point in four months on Thursday.
Blue-chip stocks in Shanghai shed 1.5% in response to be near their lowest since February. MSCI’s broadest index of Asia-Pacific shares outside Japan slid 0.9% to reach its lowest in four months. Japan’s Nikkei lost 1%, while South Korea shed 0.7%.