At its best, Huawei claimed about a fifth of the European smartphone market. Now the company only leads a shadowy existence outside of the main market of China. New sanctions could mean the end.
In the trade conflict between the USA and China, the Huawei company has to accept further losses. After the Chinese electronics manufacturer was recently able to access chips from the manufacturer Qualcomm again, the Biden government is considering completely cutting off Huawei from US suppliers with new sanctions.
More export bans for Huawei
According to insiders, US companies will hardly be allowed to sell goods to the Chinese telecom supplier Huawei in the future. The previous restrictions, which primarily included products based on the modern 5G mobile communications standard, have been extended to older technologies, said a person familiar with the matter. Parts for building WiFi networks based on the “WiFi 6” and “WiFi 7” standards also fall under the new restrictions, as do high-performance chips for artificial intelligence or cloud offerings. First, the “Financial Times” and the news agency Bloomberg reported on the tightening of the sanctions.
The US Department of Commerce pointed out that the regulations are continuously checked. It did not comment on the specific case. Huawei did not want to comment on this topic. The government in Beijing is “seriously concerned” about this development, said Mao Ning, spokeswoman for the Chinese foreign ministry. “This move violates the principles of the market economy and the rules of international trade and finance, damages the international community’s confidence in the US business environment, and represents blatant technological hegemony.”
In 2019 and 2020, Huawei was able to claim 21 percent of the European smartphone market. However, due to US sanctions, the company is no longer allowed to access Google services – a main reason why customers buy Android smartphones. Since then, the market share has already fallen to just one percent in mid-2021. The new sanctions could also eliminate Huawei’s other mainstays – such as laptops and accessories such as smartwatches and headphones.
Biden continues Trump’s sanctions on Huawei
Donald Trump, predecessor of current US President Joe Biden, blacklisted Huawei in 2019. Since then, US companies have had to apply for permits to export certain products. In this context, the authorities granted Qualcomm, among other things, permission to supply chips for the 4G mobile communications standard. The volume of the 2021 approved deliveries to Huawei was reportedly $ 61 billion.
On this basis, the sales of the Chinese group stabilized. Last year, it was reported at $91.53 billion, just below the level in 2021, when it had fallen by a third due to the previous restrictions.
In recent months, however, the US government has been tightening the thumbscrews to prevent the Chinese army from modernizing and strengthening. Among other things, Biden banned the export of Chip making machines to the People’s Republic. According to media reports, the US convinced the Netherlands and Japan to join this ban. In these two states are important providers of machines for semiconductor production. In response to the current tightening of US measures, shares in ASML, Qualcomm and other Huawei suppliers such as Applied Materials fell by up to two percent.
Sources
With material from Reuters