Huawei Crisis

So, everyone has been talking about Huawei. I know Huawei quiet well. I interned in Nokia Bell Labs and one of the competitors of Huawei is Nokia. The other major corporation that is a competition to Huawei is Ericcson. (Did you think Nokia and Ericcson were dead? Well, their phone business is gone but they are a major provider of telecommunications equipment like base stations!). And the name of your competitor will definitely come up during lunch table discussions.

Where did it all start? It began with Canada arresting Huawei’s CFO (who also happened to be the daughter of the CEO of Huawei) on the request of US. It was apparently because Huawei violated US sanctions on Iran. You can read more about it here:

Then there was always this fear about China, through Huawei, installing backdoors on telecommunication equipment. This is completely hypothetical, and zero proof has been provide for it. I think the fear is more directed towards the Chinese Government and Chinese Military. In China, nobody, even God, is not above the Chine Communist Party. The US fears that the Chinese government can force Huawei to install backdoors on critical telecommunications equipment. It can be then used to cripple communications in case of a conflict. Or even spying.

And the fears are kind of justified honestly. It was found that African Union headquarters was bugged and most of their communication infrastructure was supplied by Huawei. ( ). By the way, as per the article, the French intelligence officials also tried to convince AU officials to spy for them. Its understandable as the French had huge control over their erstwhile colonies in France even in the late 20th century. But Chinese investment, aka debt trap, has reduced much of that influence. China looks at it as a way to further their economic interests, whereas the French used to look at Africa to further their culture and economic interests. Which one is a better deal? Correct answer is none.

In midst of all this, US feared China might do something similar through Huawei. Also the trade-war began between US and China. US wanted more access to Chinese market to reduce the trade deficit. Also, Trump wanting to keep his promise to his electorate, wanted to impose tariffs on China to boost manufacturing in the US.

And in midst of it all, US put Huawei on an entity list . It might have seemed like another bureaucratic nonsense, but let not the innocuous name of ‘entity list’ fool you. It means that no US company can do business with Huawei.

  • Google said they can no longer license official Android releases to Huawei. They can use the open source version but the open source gets updates much later.
  • ARM cannot license their cores to Huawei as it contains US origin technology.
  • Broadcom, Qualcomm and all major semiconductor companies cannot work with Huawei either. Even EU semiconductor companies cannot sell to Huawei as almost all of them would have design centers in US, and any product will contain US origin technologies.
  • EDA software companies cannot license software to them as well. This is really the most crippling thing I believe. Its incredibly hard to build EDA software. Cadence, Synopsys and Mentor Graphics (now bought by Siemens) rule this market and never let any other player flourish. And they spend humongous amounts of money in R&D and talent acquisition. Its not easy to match the work of some very brilliant people in a few days/months. I don’t know what happens if they had already licensed software from these major players for 5 years already. I know its always on an yearly basis for smaller companies but Huawei is a mammoth and I am sure the trade deals would be completely different.

So what does it mean? You can buy Huawei phones but it will be ill advised now.

And now the most important question? What happens to 5G? There can be two cases:

  • Huawei has already completely cracked the 5G problem and has equipment ready for 5G installation.
  • If not, the commercial 5G will take a few more years to roll out.

Is it bad news? For people in Nokia and Ericcson, no. For people like you and me, do you really care about 5G? I mean honestly, we cannot fathom the use of a technology unless we have it. We are quiet well off. Its not like a cure to cancer where we can directly see how it is a benefit to the human race. Of course, tech enthusiasts are all in mourning. If they don’t have new tech, their viewership in Youtube drops, they make lesser money. So of course, they are more vested in this entire thing than you or me would be.

Edit 1: Found this video by BBC on the threats posed by Huawei. Looks like the UK is not too concerned about China spying as most of the communications these days are encrypted.

Threat of Huawei explored by a BBC journalist