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Huawei Diversifying Supply Chain

China Times recently reported that, despite the news about the U.S. planning to expand the export ban on Huawei, Huawei commented that it can still purchase critical chips from South Korea’s Samsung, Taiwan’s MediaTek and China’s own Spreadtrum Communications, instead of U.S. suppliers. Huawei currently depends on Taiwan’s TSMC to manufacture chips designed by itself. However, some industrial observers suggested Samsung and MediaTek may not be allowed to supply Huawei with the expanded U.S. ban because they use U.S. technology. Huawei insisted it can still move forward and there are other opportunities in Japan and Europe for supplies.

Well-known Chinese news site Sina recently reported that the Chinese government just granted special permission to allow 200 Samsung technicians to come into China and enter a NAND chip manufacturer in the city of Xi’an to help on factory expansion.

Sources:
(1) China Times, April 22, 2020
https://www.chinatimes.com/realtimenews/20200422001986-260410?chdtv
(2) Sina, April 23, 2020
https://k.sina.com.cn/article_6372825920_17bd99b4000101o5cs.html

Briefings | | |   Information/Technology US-China Relations

The Pandemic Exposed the U.S. Broadband Issues

Well-known Chinese news site Sina recently reported that around one-third of the U.S. farmers don’t have broadband Internet at home. The stay-home requirements now in place for most of the Americans exposed the difficulties on internet performance issues for a large number of people. According FCC 2019 data, the United States still has around 21 million people who have no broadband connections. Some experts expressed the belief that the actual number may even be double that figure. Before the pandemic, a lot of people lacking broadband could work around the problem by visiting a friend’s home, local libraries, or fast food restaurants. Now having to stay home without broadband is causing kids to miss online teaching, patients are losing touch with their doctors, and business owners are having trouble connecting with customers. It appears the broadband problem in the U.S. is now becoming a life or death choice. An immediate and fundamental challenge right now is that no one truly knows who doesn’t have broadband.

Source: Sina, April 13, 2020
https://finance.sina.com/gb/economy/economy_global/cankaoxiaoxi/2020-04-13/doc-ifzvhyfh6200585.shtml

Briefings | | |   Information/Technology

Xinhua: Chinese Long March Rocket Failed Again

Xinhua recently reported that, on April 9, China’s Long March III-B carrier rocket failed its satellite mission for the Indonesian satellite PALAPA-N1. The first and second launch stages succeeded but the third stage failed and the satellite was destroyed too. The failure occurred at the Xichang Satellite Launch Center. Less than a month ago, on March 16, the Long March VII Modified Rocket failed its mission at the Wenchang Space Launch Site.

According to Radio Free Asia (RFA) Chinese Edition, military analysts expressed the belief that the U.S. blockage of providing critical computer chips to China resulted in the slowdown of the Chinese technology development plans. This is also the reason for the failures seen in the recent Dongfeng Nuclear Missile tests. China had to replace certain chips with those developed domestically.

Sources:
(1) Xinhua, April 9, 2020 http://www.xinhuanet.com/2020-04/09/c_1125834989.htm
(2) Xinhua, March 16, 2020 http://www.xinhuanet.com/tech/2020-03/16/c_1125721734.htm
(3) RFA Chinese, April 10, 2020 https://www.rfa.org/cantonese/news/rocket-04102020081337.html

Briefings | | |   Information/Technology

Apple Daily: U.S.-Taiwan Submarine Fiber Cable Approved

Apple Daily (headquartered in Hong Kong) Taiwan Branch recently reported that, with the coronavirus crisis deepening, the remote working model introduced a major increase of network bandwidth demand. The FCC just approved Google’s application to open the PLCN (Pacific Light Cable Network) fiber segment between California and Taiwan. This newly approved connection will allow fast communication between Google’s U.S. and Asian data centers. The PLCN segment between California and Hong Kong was not approved due to strong opposition from the U.S. Department of Justice (DOJ). This decision ends the priority status of the Hong Kong fiber station. DOJ explained that the Hong Kong fiber channel may significantly threaten U.S. national security and law enforcement interests, since Hong Kong is getting heavier and heavier intervention from Mainland China. The DOJ position received strong support from the Department of Homeland Security (DHS) and the Department of Defense (DOD). Since 2016, Google and Facebook have jointly funded the PLCN network. Taiwan has Google’s largest Asian data center (the other two are in India and Singapore).

Source: Apple Daily Taiwan, April 10, 2020
https://tw.appledaily.com/international/20200410/CX3GHUKXM7BUKYKSDUL3UCVVGI/

Briefings | | |   Information/Technology US-China Relations

Global Times: U.S. DOJ Recommended Shutting Down China Telecom in the U.S.

Global Times recently reported that the U.S. Department of Justice (DOJ) recommended ending the authorization granted to China Telecom (Americas). The authorization permits China Telecom to operate in the U.S. for international communications. DOJ’s recommendation to the FCC cited national security and law enforcement risks. The DOJ’s recommendation was based on an investigation that proved China Telecom violated conditions in a 2007 signed agreement, which required transparency on the location where U.S. customer information is stored as well as network security details. The DOJ expressed the concern that, under Chinese laws, China Telecom may spy on U.S. communications traffic and provide sensitive information to the Chinese government. The Chinese Ministry of Foreign Affairs commented in a press conference that China is strongly against this recommendation. China asked the U.S. government to stop politicizing normal market-based commercial operations and to provide Chinese companies a fair environment for doing business.

Source: Global Times, April 10, 2020
https://world.huanqiu.com/article/3xmLcpPXDT8

Briefings | | |   Information/Technology US-China Relations

Global Times: If the U.S. Hikes Sanction on Computer Chips, China Has Counter Measures

Global Times recently published a commentary written by Ni Guangnan, one of the founding members of the China Engineering Academy and the former Chief Engineer of the Legend Group. Ni said that the United States seems to be preparing to mount more sanctions on computer chip exports to China. The new plan may cut off chips manufactured by China’s primary overseas chip supplier TSMC (Taiwan Semiconductor Manufacturing Company). Though this plan can significantly damage China’s high-tech industry, yet China does have some counter measures. One example is to ban U.S. 5G chips or products with U.S. 5G chips from the Chinese market. The potential damage on just Apple and Qualcomm alone will be around US$70 billion. China can also set limitations on government procurement of U.S. IT products, which will severely damage the U.S. Wintel ecosystem. Apparently, the U.S. is not just aiming at Huawei, but at the entire Chinese high-tech industry.

Source: Global Times, April 3, 2020
https://opinion.huanqiu.com/article/9CaKrnKqfUu

Briefings | | |   Information/Technology US-China Relations

LTN: Huawei Admitted Its Harmony OS Cannot Replace Android

Major Taiwanese news network Liberty Times Network (LTN) recently reported that the Huawei Western Europe Chief Vincent Pang admitted having “great difficulty” with handset sales. Pang said that, due to U.S. sanctions, Huawei lost its capability to bundle Google services on its smartphones. This heavily damaged Huawei’s international sales of consumer products. Huawei Chief Information Security Officer (CISO) Andy Purdy also complained about the U.S. sanctions which led to a cutoff of chip supplies from companies like Intel. It significantly limited Huawei’s growth. Huawei has its own Harmony OS, which was expected to replace Android to power Huawei’s smart devices. However, Huawei’s CEO of the Consumer Products Group, Yu Chengdong, recently told the U.S. technology magazine Wired that the company hopes to have the U.S. government’s permission to resume the partnership with Google, especially to use its Play Store. Yu said he would like to keep the Android ecosystem and the Harmony OS may need a couple more years to mature. Huawei also complained that the U.S. government still refused to open a dialogue with Huawei.

Source: LTN, April 1, 2020
https://3c.ltn.com.tw/news/39981

Briefings | | |   Information/Technology

LTN: The U.S. Aims to Cut Huawei’s Global Supply Chain

Major Taiwanese news network Liberty Times Network (LTN) recently reported that officials in the U.S. Trump administration have agreed to take new steps to reduce the global chip supply to Huawei significantly. The plan directly points to Huawei’s largest chip supplier TSMC. Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest dedicated independent semiconductor foundry, headquartered in Hsinchu, Taiwan. According to the newly proposed rules, the United States will have to certify any foreign companies that use U.S. chip-making technology or equipment before they can sell chips to Huawei. According to anonymous sources, the new effort was designed to stop TSMC from manufacturing chips for Huawei. It is still unclear whether President Trump gave the OK to this plan or not. He may have some hesitation because the implementation of this plan may not only hurt TSMC, but may also impact U.S. companies. Huawei refused to comment on the news and TSMC said it cannot comment on hypothetical questions and won’t discuss matters regarding any specific customer.

Source: LTN, March 27, 2020
https://ec.ltn.com.tw/article/breakingnews/3114302

Briefings | | |   Information/Technology US-China Relations