The damage done to Huawei continues to spread. Last week, Western Digital CEO Steve Milligan announced that his company had stopped doing business with the Chinese manufacturer at war. This is the latest blow to Huawei's business after the US announced sanctions against the company last month.
While Huawei represents less than 10% of Western Digital's revenue, Milligan told Nikkei thatsignificant customer"WD is apparently considering asking permission to continue to do business with Huawei from the US Government In April, Huawei and WD signed a statement of intent to strengthen their partnership on hard drives and non-storage technologies volatile, but this partnership is now suspended due to US findings.
At the end of May, I wrote a story exploring what Huawei processor architectures might be able to use for future designs if it were cut off chips by manufacturers like ARM. According to a discussion in this issue published by former US Assistant Secretary of the Export Administration, Kevin Wolf, it is a complex issue. US export law prohibits the export of all technology with more than a trivial amount (de minimis) of integrated American technology.
Some of you may remember that Steve Ballmer once called GPLv2 for the virus, claiming that it would "infect" any software that was accessed, as this closed source software is now classified as open source. . US export legislation seems to really work that way. Wolf written:
For example, if you are totally non-American. a carrier, an application developer or an electronics manufacturer transfers to Huawei products, software or technology of any type, of US origin or non-US origin, containing more than a minimum amount of controlled content of US origin, then the product, software or technology is still subject to US controls and prohibitions of the list of entities.
Open Source software can not be used to circumvent US export controls if the copyright in such software belongs to US companies. This would also seem to be a problem for the open-source hardware, which could mean our own assumption that Huawei could theoretically rotate the RISC-V or MIPS solution is fundamentally unachievable. The cleanroom implementation of an open source US solution may not even be possible. The US Export Law is designed to apply to American people and non-persons. The law allows non-US companies that help other companies to break the law to take responsibility for it, including prohibiting them from receiving US products as of right.
The difficulty of navigating this case explains why Huawei is expecting a dramatic drop in sales. according to BloombergHuawei plans to sell 40 to 60 million fewer phones because of the choking demand. The company sold 206 million phones in 2018 and the ban took effect only in May, which says a lot about the scale of Huawei's success.
Huawei founder Ren Zhengfei said the ban could wipe out $ 30 billion worth of business sales turnover over the next two years if the problem does not occur. was not resolved. Until now, the company has stated that it would continue to conduct research and development activities and would refrain from any layoff or sale of major assets.
The decline at Western Digital demonstrates the difficulty Huawei has been able to find suppliers for many of its components. If the phone whose manufacturer is obliged to remove the company whose manufacturer has more than one de minimis American technology, it can prove extremely difficult to find safe suppliers. TSMC has stated that it can continue to manufacture chips for the manufacturer, but even if that is true, a smartphone contains more components than processors.
The US-imposed export ban applies to all aspects of the phone, from chassis to software to firmware and hardware. Building a completely free device can prove extremely difficult. Any attempt to evade the ban by building a clean room implementation of an operating system and a hardware stack for a mobile SoC would take years. This is the kind of long-term project achievable over time, with sufficient spending and investment on the part of the Chinese government, but utterly unachievable in addressing the short-term problems of Huawei.