US-China trade war escalates as manufacturers cut ties with Huawei

May 22, 2019 //By Julien Happich
Following suit on Trump’s announced blacklisting of Chinese smartphone and networking equipment maker Huawei last Friday, an increasing number of components suppliers have announced they would stop supplying parts to the smartphone maker.

That is for fear of retaliation from the US administration, although the companies involved will inevitably suffer from impacting revenue cuts due to lost sales to Huawei.

According to a recent report from Bloomberg, chipmakers such as Intel, Qualcomm, Xilinx and Broadcom have already taken that step, while Google is to cut off the supply of some of its software services as well as hardware to the Chinese mobile phone equipment maker.

Now, such an imposed ban on doing business with Huawei is likely not only to cripple the Chinese company accused of espionage but also the US economy as a whole, the newspaper notes.

Huawei has become the cheapest and most efficient provider of networking equipment including for the highly anticipated roll out of 5G wireless networks upon which ought to rely many upcoming technologies such as self-driving cars, smart cities and many new consumer-oriented applications where ultra-low latency fast connectivity to the cloud are a must.

Many of the above chip makers are increasing reliant on doing business with Huawei, but also hoping to access China as the world’s second largest economy. This trade war is also affecting European companies whose chips or systems occasionally contain IP from US companies. For example, German chip maker Infineon Technologies has reportedly stopped deliveries of products originating in the U.S. due to the new rules.

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