5G and Beyond

Huawei mopping up stakes in domestic chip suppliers – report

Huawei Technologies has been quietly building up a stock of China-based technology companies in order to boost its supply chain, according to reports.

Citing public records, Reuters said the China-based vendor established Habo Investment in April 2019, and since last August has acquired 17 stakes in Chinese tech companies.

Reuters noted the investment arm was established in response to what Huawei's rotating chairman, Guo Ping, last week described as "suppression" by the US.

Shop til you drop: Huawei is pushing the blues away with a spot of retail therapy.  (Source: Karlis Dambrans on Flickr CC 2.0)
Shop til you drop: Huawei is pushing the blues away with a spot of retail therapy.
(Source: Karlis Dambrans on Flickr CC 2.0)

This came after escalating restrictions that have cut off Huawei's supplies of many overseas chips and effectively barred it from building its own.

Most of Habo Investment's deals are said to have been in chip-related Chinese startups, a few of which have become part of Huawei's supply chain. However, many of the businesses are at an early stage of development.

According to CB Insights, the most recent five investment deals were for stakes in Xingongshi Technology, SmartSens Technology, Oriental Semiconductor, Fuxi Technology and Vertilite.

China Money Network also reported that Habo invested in artificial intelligence company iDeepWise in October last year, and in Suzhou MotorComm Electronic Technology, a wired communication chips provider, in November.

In the firing line
Efforts by Huawei to fill the gaps in its supply chain come as little surprise, as it seeks alternative ways to shore up its smartphone and network equipment business.

Huawei has certainly become the focal point of the Trump administration's trade war with China, and opposition to the use of its equipment in 5G networks is now evident in a number of markets around the world.

US sanctions have also been imposed on Huawei: The third and most severe round started on September 15, denying the vendor access to any components made with US technology.

The company is tussling with the US government on a number of fronts: It is currently engaged in a legal battle to prevent its chief financial officer, Meng Wanzhou, from being extradited from Canada to the US, with the latest round set to take place today.

Meng was first arrested in December 2018, charged with being in violation of US sanctions when a company controlled by Huawei sold telecom equipment to Iran.

Specifically, the US said she lied to bankers about Huawei's links to Skycom Tech, a firm that was active in Iran and an alleged shell company for Huawei.

According to US prosecutors, and noted again in this Canadian trial, Huawei's Meng is said to have claimed that Skycom was a partner, not a subsidiary.

Spreading the net
Huawei is of course far from the only China-based company to have fallen foul of the Trump administration.

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TikTok and WeChat have recently been in the news over a possible ban in the US.

However, a federal judge blocked an order that would have required Apple and Google's owner Alphabet to remove TikTok from their US app stores, and WeChat users won a preliminary injunction against a similar ban.

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— Anne Morris, contributing editor, special to Light Reading

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