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Bloomberg
Huawei pivots to fish farms, mining after US blocks phones
(Bloomberg) – Six months after the Trump administration dealt a blow to Huawei Technologies Co.’s smartphone business, the Chinese telecommunications giant is turning to less glamorous alternatives that could possibly offset its decline more large contributor of income. clients is a fish farm in eastern China that is twice the size of New York’s Central Park. The farm is covered with tens of thousands of solar panels fitted with Huawei inverters to protect its fish from excessive sunlight while generating power. About 370 miles west in coal-rich Shanxi Province, wireless sensors and underground cameras monitor oxygen levels and potential machine malfunctions in the mine – all provided by the titan of technology. And next month, a shiny new electric car with its lidar sensor will debut at China’s biggest auto show.Once the world’s largest smartphone maker, the Chinese company has seen a series of US sanctions. almost wiping out his lucrative consumer business. As the Biden administration keeps the pressure on Huawei, billionaire founder Ren Zhengfei has ordered the company to expand its client list in transportation, manufacturing, agriculture and other industries. . Huawei is the world’s largest supplier of UPSs and now relies on growing those sales along with its cloud services and data analytics solutions to help the company of 190,000 employees survive. said last month when opening a mining innovation lab partly sponsored by Huawei. “Right now, we just want to work harder and keep looking for new opportunities to survive.” Ren said the new initiatives could offset the decline in its cellphone business “more or less this year,” although the company declined to provide specific numbers. Its consumer unit generated revenue of 256 billion yuan ($ 39 billion) in the first six months of 2020, more than half of the company’s total. It managed ‘marginal growth’ in sales and profits last year, driven by record 5G base station orders and strong first-half smartphone sales. Huawei has been exploring business opportunities beyond that for years. telecommunications equipment and smartphones, but the efforts took on new urgency after Phone shipments fell 42% in the last three months of 2020, largely due to a Trump-era order that cut off its ability to obtain the most advanced semiconductors. The Biden administration has informed some suppliers of stricter conditions on previously approved export licenses, banning items for use in or with 5G devices, according to reports. people familiar with the move. The US Federal Communications Commission on Friday also included Huawei in a list of companies whose telecommunications and video equipment “pose an unacceptable risk to national security.” Read more: How Huawei landed at the center of the global tech struggle: QuickTake The US ban had limited impact on Huawei’s emerging businesses, as most of the required components are available from Chinese suppliers, according to a person directly involved in the initiative. To meet growing demand from entrepreneurs, including Huawei, local suppliers are extracting better performance from mature technologies that Washington has not banned, the person said, declining to be identified to discuss internal matters. power generation for solar panels is based on 28-nanometer technology, which Chinese companies are capable of manufacturing. Other components, such as power modules, can be manufactured with 90nm or greater technology. Yangzhou Yangjie Electronic Technology Co. and China Resources Microelectronics Ltd. are among the top producers of power diodes in China. Each inverter – slightly larger than an outdoor unit of a central air conditioner – can sell for over 20,000 yuan, more than Huawei’s latest high-end foldable phone Mate X2 . The company plans to roll out more of its PV inverters, as Beijing’s drive to have carbon emissions in the world’s second-largest economic peak by 2030 drives investments in renewable energy. less sophisticated than mobile phone processors and may in part come from European suppliers, according to a person familiar with the subject. This allowed Huawei to overtake the auto industry, moving engineers from other business units to work on sensors for self-driving cars and power units for electric vehicles. Although the company has denied plans to launch any electric vehicles under its own brand, Huawei has operated. with several manufacturers to test its autonomous driving and driver-car interaction technologies. Its entertainment features are found in Mercedes-Benz sedans, and the company has partnered with domestic electric car makers such as BAIC BluePark New Energy Technology Co. to develop smart car systems. The first model under its partnership with Chinese electric vehicle maker Arcfox αS HBT will be unveiled at Auto Shanghai 2021 in April. Another initiative dubbed 5GtoB involves Huawei rolling out 5G technology in areas ranging from healthcare from health to aircraft manufacturing. The company has helped China build the world’s largest 5G network, providing more than half of the 720,000 base stations operating across the country. He’s now looking to use the country’s 5G connectivity to help companies hit by a pandemic automate factory lines – joining other tech giants like Xiaomi Corp. and Alibaba Group Holding Ltd. to try to modernize. manufacturing – and digitizing once labor-intensive industries like Huawei has signed more than 1,000 5GtoB agreements in more than 20 industries with the help of telecom operators and partners, according to rotating chairman Ken Hu . Online education, entertainment and transportation are among the sectors he plans to explore, he said. In January, the company gave smartphone czar Richard Yu a new role to lead its rapidly growing cloud and AI business. “The adoption of 5G in mining, medical services and manufacturing is increasingly clear, and some of the applications are in use across the country,” Liu Liehong, vice minister of industry and technology. information, said at an industry event in Shanghai last month. Ren was personally leading the expansion in the mining sector, meeting with local officials and inspecting coal mines in Shanxi province. “Most information and communications technology companies didn’t see mining as an area where they could break into the market, but we did,” the billionaire told reporters on the month. latest. “China has about 5,300 coal mines and 2,700 ore mines. If we can serve those 8,000+ mines well, we could expand our services to mines outside of China. Read more: China’s coal industry fights for survival in a greener world The decline of smartphones, its longer-term future – and its ability to continue fueling the 5G rollout in China – remains in the dark . Its subsidiary HiSilicon had been the nation’s most proficient chipset designer, making the high-end processors that power the company’s smartphones and wireless base stations, before Washington cut off access to the latest design software from the company. chips and subcontractors such as Taiwan Semiconductor Manufacturing Co. For now, the company has told its wireless customers that it has enough communication chips to support base station construction in 2021. But it’s unclear how long those stocks can last and what options Huawei has after those stocks run out. Wireless operators have been cautious about their 5G development and there is “a lot of uncertainty” as to whether Huawei will be able to continue supplying equipment in the long term, Jefferies analyst Edison Lee wrote in a commentary. note earlier this month. “The ongoing political friction has cast shadows on the business activities of Huawei and other Chinese companies for the foreseeable future and strategic investments in emerging technologies are essential for the sustainable growth of Huawei’s business,” Charlie Dai said. , Senior Analyst at Forrester Research Inc. (Updates with FCC designation in seventh paragraph, analyst commentary in penultimate paragraph) For more articles like this, please visit us at bloomberg.com Subscribe now to stay ahead with the most trusted source of business information. © 2021 Bloomberg LP
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