Top executive at the Chinese vendor plays down the impact of US trade restrictions but declines to share details of current chip supply partners.

Robert Clark, Contributing Editor, Special to Light Reading

June 26, 2019

3 Min Read
With US Firms Skirting Ban, Huawei Exec Sees Business as Usual

With news emerging that US firms have been skirting a ban on selling to Huawei, a senior executive of the firm said today the company has not felt any supply chain impact from the US blacklisting.

Kenneth Hu, one of Huawei's rotating chairmen, told a media briefing at MWC Shanghai today the company's diversification strategy had enabled it to move quickly to other component suppliers.

He said business operation was normal and, despite "some fluctuation, the overall situation is business as usual."

However, reporting by the New York Times shows Huawei is also being aided by some US vendors that have been able to classify their products as not US-made.

"Goods produced by American companies overseas are not always considered American-made," the Times story said, noting that shipments to Huawei had resumed about three weeks ago.

The Semiconductor Industry Association seems to have confirmed this in a statement issued last Friday, noting that "it is now clear some items may be supplied to Huawei consistent with the Entity List and applicable regulations."

Hu made a similarly legalistic point, saying that even though Huawei objected to the US sanctions the company had to ensure its transactions with suppliers were in "full compliance with laws and regulations."

He added: "For components that are affected by the list, we have already found alternative supply solutions, including ourselves or sourcing from non-American partners."

He did not elaborate on the company's current chip supply partners, or what role Huawei's semiconductor unit HiSilicon is now playing.

His remarks, aimed at reassuring anxious customers, follow a gloomy forecast by founder Ren Zhengfei last week that the company would take a 30% revenue hit in the next two years because of the blacklisting.

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Together the two statements seem to tell the story that production is continuing as normal -- for the time being -- but the company is bracing for the financial pain from the loss of customers and channel partners.

CEO and founder Ren previously said the company had been preparing for several years for a possible disruption in supply. Following last year's ban on the sale of US components to ZTE, a smaller Chinese equipment maker, Huawei increased its inventory spending in anticipation of possible supply restrictions, its 2018 accounts showed.

Despite the upbeat message on the supply chain, Hu did not have any positive news on the pain point in Huawei's device business, the severing of its access to the Android operating system (OS).

Huawei has accelerated work on its Hong Meng handset OS, but Hu said today he had no updates on its progress and could not give a timeline for Hong Meng's commercial debut.

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— Robert Clark, contributing editor, special to Light Reading

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About the Author(s)

Robert Clark

Contributing Editor, Special to Light Reading

Robert Clark is an independent technology editor and researcher based in Hong Kong. In addition to contributing to Light Reading, he also has his own blog,  Electric Speech ( 

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