Washington has long claimed, without providing evidence, that Huawei products threaten national security because they can be used to spy on Americans. Huawei has repeatedly denied that its gear and products pose a national safety risk.
The company did not respond to a request for comment, but a senior U.S. executive said Huawei would survive.
“We took a hit of about $ 12 billion in our revenue in 2019, and we may take a hit again, but we are committed to the long term, and we have the opportunities and resources to adapt over time,” Andy Purdy , chief security officer for Huawei USA, told CNN Business’ Julia Chatterley. “We are privately owned, we have time, and if we take a hit in revenue that’s fine. We can bounce back if we continue to do so.”
Dots dotted
Paul Triolo, head of geotechnology at Eurasia Group, called the latest US restriction “a fatal blow to China’s main technology company.”
It is “potential [the] most serious effort by the U.S. government to diminish the company’s ability to obtain advanced semiconductors for all of its business lines, “Triolo wrote in a note on Monday.
The new U.S. sanctions could also be the definitive nail in the coffin for Huawei’s mobile phone business.
Huawei’s hope that it could rely on third-party chip designers to continue making smartphones “has been dashed,” Edison Lee, an analyst with brokerage firm Jefferies, wrote in a note Monday.
Fallout for American companies
American companies will suffer as well.
“These broad restrictions on commercial chip sales will bring significant restrictions to the U.S. semiconductor industry,” said John Neuffer, president and CEO of the Semiconductor Industry Association, a trading group representing U.S. chipmakers.
Chip sales to China “are driving research and innovation for half-judges here in the [United States], which is critical to America’s economic strength and national security, “Neuffer added in a statement.
But David Zinsner, Micron’s former vice president and chief financial officer, warned in a revenue call in June that the company “saw an impact from the recent restrictions imposed on Huawei.”
Other U.S. tech companies could also suffer collateral damage in Washington’s campaign against Huawei, according to Triolo, of Eurasia Group.
The recent move by the United States against Huawei and recent threats against other Chinese tech companies mean “a criminal move by Beijing against a leading US tech company is highly likely,” he said.
Beijing returned on Tuesday against Washington’s restrictions.
“China is firmly opposed to the deliberate harassment and repression of Huawei and other Chinese companies by the United States,” Zhao Lijian, a spokeswoman for the Foreign Ministry, told reporters.
The United States “has generalized the concept of national security, abused national power, imposed various restrictive measures on Chinese companies such as Huawei, and bullied without providing evidence,” Zhao added.
Apple’s business in China is in jeopardy, according to Lee of Jefferies.
It remains unclear whether iPhones in China will allow WeChat or WeiXin (the Chinese version of the app) to be installed, given “Trump’s recent announcement to ban U.S. companies from doing business with WeChat,” Lee said.
That would make Apple devices a lot less attractive in China, where WeiXin is known as a so-called super-app, and is used to reach rides, message friends and family, pay for electricity bills, deliver food and much more .
– Shanshan Wang of CNN contributed to this report.
.
