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The US Ban on Huawei Is Causing a Global Mess

The highly interconnected nature of the global tech industry means the US ban has wide ripple effects.

by Jordan Pearson
May 22 2019, 5:34pm

Image: Flickr/Andri Koolme

The US ban on Chinese electronics manufacturer Huawei is having ripple effects that are making an even bigger mess of the entangled rat king that is the global tech industry.

The US Commerce Department put Huawei on the “Entity List,” which is essentially a trade blacklist, last week due to national security concerns. Though the supply ban originates in the US, companies including chipmakers and telecoms based in Europe and Japan are falling in line, and the ripple effects are being felt all over the world. Here’s a summary of some of the fallout from the ban so far:

For some non-US companies, the decision to fall in line with the US ban on Huawei reflects the highly-connected nature of the global tech industry, where multinational corporations may have staff or interests in several countries.

“ARM has a lot of staff in the US, and probably US legal entities. I suspect that it would be a fair amount of work for them to untangle themselves to get to a point where they could act as a UK company,” said Kyle Wiens, CEO of device repair advocacy site iFixit. “If I were their management, I’d figure that it’s probably easiest right now to fall in line and let the US/China governments negotiate a ceasefire.”

iFixit does teardowns of electronics, which often reveal the interconnected, global nature of device manufacturing. Those teardowns reveal that Apple doesn’t really make most of the components that are in the iPhone. Huawei doesn’t make many of the components in its phones, either: The Huawei P20 Pro has a camera made by Germany’s Leica; chips made by Dutch company NXP; American companies Micron, Cypress, Texas Instruments, and SkyWorks; and parts made by South Korea’s Samsung.

The fallout from the US Huawei ban makes clear how interconnected US tech companies and the Chinese firm are, and it also traces the tangled web of a global industry that is now navigating a national trade ban.

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