The impact of the Trump administration’s threats to choke Huawei Technologies Co. reverberated across the global supply chain on Monday, hitting some of the biggest component-makers.
Chipmakers including Intel Corp., Qualcomm Inc., Xilinx Inc. and Broadcom Inc. have told their employees they will not supply Huawei until further notice, according to people familiar with their actions. Alphabet Inc.’s Google cut off the supply of hardware and some software services to the Chinese mobile phone equipment giant, another person familiar said, asking not to be identified discussing private matters.
The Trump administration on Friday blacklisted Huawei — which it accuses of aiding Beijing in espionage — and threatened to cut it off from the U.S. software and semiconductors it needs to make its products. The ban, which had been anticipated, hamstrings the world’s largest provider of networking gear and No. 2 smartphone vendor.
Blocking the sale to Huawei of critical components could also disrupt the businesses of American chip giants like Micron Technology Inc. and retard the rollout of critical 5G wireless networks worldwide — including in China. That in turn could hurt U.S. companies that are increasingly reliant on the world’s second largest economy for growth.
Chipmakers and other companies are under pressure in part because they will lose revenue when they cut off Huawei as a customer. But the tech industry is also poised to suffer in a more fundamental way. Huawei depends on many U.S. companies for components woven into the 5G equipment it makes.
Given a dearth of competitors capable of making 5G gear as reliable and inexpensive, any impediment to Huawei’s production of this equipment could slow the rollout and adoption of 5G technologies. That in turn could damp demand for smartphones and networking equipment and may also hinder the development of new technology that will depend on 5G, such as self-driving cars.
If fully implemented, the Trump administration action could have ripple effects across the global semiconductor industry. Intel is the main supplier of server chips to the Chinese company, Qualcomm provides it with processors and modems for many of its smartphones, Xilinx sells programmable chips used in networking and Broadcom is a supplier of switching chips, another key component in some types of networking machinery. Representatives for the chipmakers .. ReadMore
